Realty policy clarification required

In the face of these changes in direction, the CASS insists that more policies should be rolled out "as soon as possible", and government policies and expectations clarified.

"The central bank, while cutting interest rates, has maintained its previous policy that mortgage rates for homebuyers could be lowered to as much as 70 percent of the benchmark interest rate.

"This signaled a reduction in mortgage rates, and was the major reason for the change in market expectations," Ni said.

The CASS suggests that mortgage rates should not be lower than the benchmark interest rate.

It said that the mortgage rate for second-house purchasing should be raised to 1.2 times the benchmark interest rate, and loans should not be provided to third house buying.

Responding to market concerns that a tougher policy would dampen already flagging real estate investment, and jeopardize macroeconomic growth overall, Ni added that the growth in the third quarter should rebound, as there is still room for growth in consumption and infrastructure.

The CASS' suggestion of tougher property measures correspond to central government plans to "resolutely" keep the curbs in place.

Since early June, nine central ministries have voiced their resolution to keep a tight grip on the property market.

But some experts have also expressed doubt on too much reliance on administrative intervention to adjust the market.

Yang Hongxu, deputy director of the Shanghai-based E-house China Research and Development Institute warned that the curbs may backfire, as developers reduce supply of houses thus pushing prices up again.

zhengyangpeng@chinadaily.com.cn