China will increase the supply of land for homes and spend more on affordable housing projects, President Xi Jinping said in remarks reported on Wednesday, as the government steps up efforts to stabilise a red-hot property market.
New home prices rose the most in nearly three years in September, adding to the risk of a property bubble in the world’s second-largest economy. Authorities are also concerned about social stability as more people are priced out of the market.
The uneven success of efforts to rein in the market has led some analysts to speculate the government may unveil measures during a Communist Party leadership meeting in November, including possibly raising property taxes.
“We must be determined to spend more efforts to solve various problems in the housing market,” the official Xinhua news agency quoted Xi as saying in a politburo meeting on Tuesday.
“We should make every effort to increase housing supply while attaching importance to the adjustment of the public’s housing demand,” Xi was quoted as saying.
The government will establish a housing supply system and will be mainly responsible for the supply of affordable housing while market forces will govern the supply of other types of housing, Xi said.
Property prices have climbed despite slower economic growth and government efforts to curb property price rises, in large part because of the view that property is one of the best investment options.
In September, property price rises in Beijing and Shanghai were particularly high, at 16 per cent and 17 per cent respectively. The mayor of Shanghai said on the weekend the city would increase the supply of cheaper homes.
China invested 1.1 trillion yuan (US$180 billion) in building cheap homes last year, and has a target of building 4.7 million such homes this year.