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The importance of urban housing in the country's next stage of development has been starkly illustrated by recent strong measures to cool down the overheated sector.
The effort is primarily focused on a few cities Beijing, Shanghai and some in the Pearl River Delta, the nation's largest manufacturing base. In the first quarter this year, house prices jumped 15 per cent in the capital and 35 per cent in Shenzhen, a booming city in Guangdong Province.
The key measures of the central government's latest package of housing market policies, announced on Monday and promptly dubbed "the 15 points" by industry observers and press commentators are:
The minimum down payment for a new apartment larger than 90 square metres will be raised from 20 per cent to 30 per cent of the total price;
A transaction tax will be imposed on people reselling their properties within five years of purchase, instead of the current two years.
Social scientists and media commentators have generally welcomed the policies in interviews with China Daily, and urged the government to implement them effectively and skilfully.
A steady supply of housing is essential for low- and middle-income groups in the cities for three strategic reasons, said Han Meng, a researcher with the Institute of Economics at the Chinese Academy of Social Sciences. They are:
To slow down the growth in fixed-asset investment;
To rein in the continuing rise in property prices; and
To prevent urban housing issues from causing other social problems.
Bai Nansheng, a professor at Renmin University of China, said that housing expenses are already claiming too much of the total income of young city-dwellers, squeezing out spending in education and other activities.
Yu Zhiyong, a real-estate analyst with China Merchants Securities, noted that the Ministry of Supervision, a disciplinary enforcement authority, is for the first time one of the nine central government agencies to jointly sign the "15 points".
Anna Kalifa, Beijing-based head of research of Jones Lang LaSalle, an international real-estate consulting firm, told China Daily that for first-time buyers eyeing a modest home, the policies are welcome because 70 per cent of all houses are required to be smaller than 90 square metres.
At the same time, Wang Yu, an urban planning official in Guangzhou, is happy because land-related information which some property developers have kept vague has to be made public. That requirement will make it tough to manipulate prices, he said.
The policies will also discourage developers from building bigger and more expensive units while most home buyers are demanding smaller units.
In Shanghai, industry insiders say they believe the new policies are unlikely to have as strong an impact as last year when tough local and central regulations came into place.
According to Zhang Yuliang, president of Greenland Group, one of the largest property developers in Shanghai, many of the policies announced by the central government have already been implemented in the city. As a result, fewer increases have been reported in housing prices for about a year.
Local developers have "already garnered the experience" to cope with abrupt policy changes, said Chen Ning, vice-president of Dahua Group, a real-estate company in Shanghai.
Zhang Yu in Shanghai and Zhan Lisheng in Guangzhou contributed to the story