Property prices test governance ability

The National Bureau of Statistics released property prices of 70 major cities in September. The figures showed that apart from Wenzhou, 69 cities experienced continuing house price increases, of which Beijing took the lead with a rise of 20.6 percent compared with the previous year.

The news has come as a heavy blow to potential house buyers. Media reports before have predicted that some large and medium-sized cities would probably see a decline in house prices, bringing hope to those looking to buy a house.

It may be hard for house owners to imagine how desperate people who have been working in first-tier cities without their own houses feel about the drastic rises in property prices.

The Chinese government has formulated a number of policies and measures to regulate house prices in recent years, but China's large cities still top the world in terms of speed in house price rises. The government seems to have suffered repeated frustrations despite its omnipotent regulation capability, and the previous administration's pledge to bring house prices back to reasonable levels has seemingly fallen through.

High property prices in large cities including Beijing, Shanghai and Guangzhou have gradually turned into a political issue, and whether the prices will see a soft landing is not only pertinent to economic sustainability, but also impacts social stability in China.

It is obvious that continuing price hikes in first-tier cities will create a bubble that will burst sooner or later. Dramatic price increases in China's real estate market have caused a great deal of pain for a certain number of people but a meltdown in the property realm will bring more calamitous consequences to the overall economy.

Such rampant prices may compel the government to resort to extreme policies such as imposing property tax, but it must be pointed out that this imposition will result in negative social impacts if it incurs losses for middle-class Chinese.

Any society has its own way of containing price increases, but we must figure out a way to address this problem at the lowest cost. Authorities have put forward a key measure for imposing restrictions on purchases of second and third homes, but this has not been seriously implemented in many cities.

Real estate is not purely a commodity market, so it is not realistic to make it completely follow market rules. Suggestions to classify China's houses appear rational, but they present a more arduous task.

Soaring house prices have become a long-term conundrum rarely seen since the adoption of the reform and opening-up policy in China.

Though it is painful to control skyrocketing prices, the government is supposed to take tougher measures to avoid a further collapse the public can hardly afford, since this thorny issue which has gone beyond the government's ability to regulate actually serves as a serious alarm bell.