Providing cheap homes is the key

ACCORDING TO THE LATEST OFFICIAL DATA, so far this year, 50 key cities nationwide have made 764.5 billion yuan ($111 billion) by selling State-owned land in the realty market, which is 53.3 percent higher than that during the same period in 2016. Beijing Youth Daily comments:

What is strange is the fact that most of the 50 cities have taken measures to prevent speculation in the realty market but at the same time the revenue from land sales jumped by more than 50 percent. This indicates that developers still expect higher housing prices in the near future, which fly in the face of what many local governments have done to control the too rapid rise in home prices. Many of them still have confidence that home prices will still rise despite the policies introduced by local governments.

The developers have ample money in hand, as they are given large loans by domestic banks, which means they can purchase land at much higher prices than last year. They are not afraid of the stagnation of the housing market, which will make it impossible for them to repay their loans since even if they cannot sell the houses they have built, the risk will not be theirs but the banks'.