China Attempts to Deflate its Unstable Property Bubble
China will spend nearly $200bn (£123bn) on the scheme, part of plans to build 36m low-cost homes over the next five years, said deputy housing minister Qi Ji, speaking at an annual political meeting in the capital.
The pledge came a few days after premier Wen Jiabao promised to “resolutely” curb speculation to tackle excessively rapid price increases.
Authorities have taken a series of measures since spring last year, including raising interest rates, increasing the minimum down-payment on second homes and restricting the rights of foreigners to buy property or Chinese citizens to buy multiple units. Two cities are imposing sales taxes.
While the measures have slowed growth, many fear it remains too high. In March 2010, urban housing prices shot up by 11.7% year-on-year, according to figures from the national bureau of statistics. December saw the lowest increase in over a year – but it was still 6.4%.
Economists are watching for the latest data anxiously: independent research from SouFun suggested a month-on-month increase of around 1% in January: the biggest such increase for half a year.