The exception of Southwest China's Chongqing Municipality from the country's skyrocketing real estate market, which is the result of government controls, will provide insights for other local authorities that want to rein in the frenzied market, experts noted on Thursday.
In August, the average new home price in Chongqing contracted 0.24 percent year-on-year to 7,125 yuan ($1,068) per square meter, while average new home prices in China's 100 major cities gained 2.17 percent year-on-year to 12,270 yuan per square meter, according to the China Index Research Institute (CIRI).
The local government is also planning to shut down 1,500 "shell real estate enterprises" over next three years, with only 500 competitive ones remaining in the market, domestic news portal sina.com.cn reported, citing Mayor Huang Qifan.
Chongqing's property market has been relatively stable amid its robust GDP growth and what Wang Jianlin, chairman of developer Dalian Wanda Group, has described in an interview as the country's "biggest housing bubble in history." That is because of government-led market measures, experts noted.
One of the policy tools is the municipality's subsidized housing program, Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service, told the Global Times on Thursday.
It is estimated that the Chongqing government has built public housing projects totaling 40 million square meters, the CIRI said in a report. The area represents 22 percent of the municipality's current available land.
This "ample" supply has met local residents' housing demand, which in turn suppresses any trend for prices to soar because of pickup in demand, Hui said. "It also curbs speculative buying."
Besides, the Chongqing government has also adopted a strategy of "forward land reserves and steady land release," in a bid to effectively control land supply, experts noted.
For example, the city's innovative securitized land exchange system, which was rolled out in 2008 with the aim to optimize the space of arable and construction land, has increased the municipality's land supply by 14 percent per year, said the CIRI report.
"Market expectations that land supply will be abundant for a prolonged period has helped cool down the land price, as well as home prices," Hui explained.
Chongqing topped China's GDP list in 2015 with a growth rate of 11 percent, according to the National Bureau of Statistics.
Yet, unlike other cities that relied heavily on revenue from the property sector, Chongqing's economic structure is more focused on the high-tech and finance sectors, Hui said.
Therefore, local authorities should draw on Chongqing's lessons by "planning ahead and thinking for the long term," experts noted.
A number of cities, including Fuzhou in East China's Fujian Province, Kunshan, East China's Jiangsu Province, as well as Beijing and Shanghai, have rolled out measures, such as housing purchase limits and higher requirements for down payments, to control rising home prices.
