Xinhua Insight: China's property market to cool down: experts(2)

LONG-TERM CONTROL

China's economy expanded 7.6 percent year on year in the second quarter, slowing from 8.1 percent in the first quarter. The growth marked the sixth consecutive quarter of decline, indicating increased pressure for the government to stabilize economic growth.

However, Liu said curbs on the property market will not be loosened for the purpose of stimulating growth, as China's cabinet has strengthened its supervision over the implementation of the measures by local governments.

Authorities have lowered the expected economic growth rate for the year to 7.5 percent, creating space for property sector curbs, Liu said, adding that the figure demonstrates the government's determination to maintain its controls.

Qin Hong, director of the Center for Policy Research under the Ministry of Housing and Urban-Rural Development, said the central government intends to curb property speculation and increase supplies of affordable housing and ordinary commodity housing.

"Bringing housing prices down to a reasonable level is the short-term target, but our long-term goal is to build an effective, healthy and orderly property market," Qin added.

Zhou said housing prices are not only an economic issue, but also a political one, since they are closely related to people's livelihoods.

Experts said they expect some developers to turn to commercial and tourism-related property to decentralize market risks as the regulations continue to take effect.

"China's property market has entered a transformative period," Qin said.

Chen Huai, director of the Institute of Urban-Rural Development of China, said urbanization and a changed consumption structure can ensure the long-term development of the economy.

"The real estate sector will have a lot of opportunities for development during the next 20 years with the deepening of China's urbanization," Chen said.

Renowned economist Fan Gang, director of the National Economic Research Institute, said the curbs have already achieved success.

Housing prices in first-tier cities that had surged before 2010 have been tamed by the regulations, Fan said, adding that the decision to refrain from implementing the policies in smaller cities has helped avoid a nationwide property bubble.

During the last two years, housing prices have remained at roughly the same level, while average per capita income has increased by more than 10 percent year on year, which means that housing prices have already lowered in comparison to the average income, Fan said.

The Bo'ao Real Estate Forum, first held in August 2001, is the Chinese real estate industry's biggest professional gathering. This year's forum attracted over 1,000 real estate developers and experts.