China adds national pledge to curb housing prices in government work report

Vow comes as Beijing municipal government raises down payments for most second home purchases to 80 per cent

PUBLISHED : Friday, 17 March, 2017, 11:46pm
UPDATED : Saturday, 18 March, 2017, 10:48am

The Chinese central government has added a new line in the final version of its annual work report, pledging to curb surging property prices in big cities, as home prices in central Beijing rise to levels on par with Hong Kong.

A day after the revised government work report was published, the Beijing municipal government announced new measures to discourage home buying, including raising down payments for most property deals for second home purchases to an unprecedented 80 per cent.

Beijing rolls out harshest ever home buyer down payment levels

The added pledge to curb housing prices was one of 78 revisions to the final version of the government work report since Chinese Premier Li Keqiang read the initial version to the National People’s Congress two weeks ago.

“Containing excessive home price rises in hot ­cities” is listed as one of the key tasks this year, according to the finalised document released by Xinhua on Thursday. The document will serve as a guideline for the central government this year.

Housing prices in big mainland cities such as Beijing, Shanghai and Shenzhen have become increasingly unaffordable for ordinary people despite the government’s repeated efforts to contain prices. In Dongcheng and Xicheng districts in Beijing, the average asking price for flats has reached about 120,000 yuan (HK$135,000) per square metre, according to Homelink, a real estate services company.

Han Wenxiu, deputy director of the State Council Research Office who helped draft the report, said on Friday that local governments in areas with surging property prices should adopt financial, fiscal and taxation policies to prevent prices rising too quickly.

Other options included increasing land supply or regulating agents and transactions. “Generally speaking, we should reduce high inventory but also stabilise property prices,” Han said.

Mortgage loans accounted for nearly half of the new lending on the mainland last year and the trend has continued this year.

China property developers cut new home prices in compliance with government curbs designed to cool market

Zhou Xiaochuan, governor of the People’s Bank of China, said last week that mortgage lending would continue to grow this year even as cooling measures would slow its growth.

So far more than 10 smaller cities, including Nanjing, Qingdao and Sanya, have tightened property price restrictions since the end of ­February.

The work report also approved construction of nuclear power stations “safely and efficiently”. China plans to build 60 nuclear power plants over the next decade, after construction was suspended when an earthquake and tsunami caused a nuclear disaster in Fukushima in Japan in March 2011.