This analysis shows that the root causes for excessive real-estate price rises in recent years come from the defects of policies involving real-estate loan expansion, taxation in the land property sector and market management. It is these maladies that have triggered excessive expansion of investment-oriented and speculation-geared housing consumption, which, in turn, set off round after round of sharp price hikes.

In view of all this, the government should work out a package of policies to hold investment-purposed and speculation-oriented housing consumption under check, involving mortgages, taxes levied on real estate and use of land resources, and the taxes imposed on possession of land property and its transfer.

In addition, strict differentiations should be made between the need to buy houses for living and that for investment purposes, or for sheer speculation.

(China Daily 05/11/2007 page10)