CBRC chief's property comments hint at easing of credit slowdown

China's housing market was being driven by a 'huge' demand, the country's top banking regulator said yesterday.

'There is a huge need for Chinese people to buy their first or second home,' said Liu Mingkang, the chairman of the China Banking Regulatory Commission, in remarks made at the Boao Forum.

The blunt comments from the man responsible for overseeing bank lending and avoiding a credit blow-out suggest that China will continue to promote home ownership and will not crack down heavily on credit expansion. However, there may be more of the smaller steps already taken to curb over-aggressive lending by banks.

Property prices have been soaring in key cities since last year, generating concerns about the possibility of a price bubble.

The State Council has introduced measures on credit and land supply to curb the rising prices to address mounting social discontent about the cost of housing.

However, property prices have so far kept climbing. In February, the average price of a home in 70 cities rose 10.7 per cent from a year ago, the quickest pace of growth since March 2008.

Liu attributed the demand and price growth to continuing urbanisation and China's efforts to boost domestic consumption. While any market had price fluctuations, he added, he did not believe there was a serious downside risk for China property prices at present.