China's new macro measures are expected to curb soaring house prices and the increasing amount of empty commercial buildings.

 

A State Council meeting last Wednesday announced six major policies for China's real estate market, emphasizing that tight tax, loan and land regulations would be put in place to restructure the real estate industry.

 

The new measures show a shift in the government's policy, said Dong Fan, dean of the real estate market researching center of Beijing Normal University. He added that the new measures prove that control of market demand and the increase of supply should be included in the government's macro-control policy.

 

The measures are designed to adjust the housing supply structure to provide less expensive apartments for low-income families.

 

The vacant area of China's commercial buildings had surged 18.9 percent from last year to 122 million square meters by the end of April this year, the National Bureau of Statistics reports.

 

The bureau said the vacant commercial residential buildings amounts to 69.21 million square meters, up 15.9 percent from the same period a year earlier.

 

Since China adopted macro-control over the real estate market last year, the increasing investment in the sector and price hikes were reined in initially. But a survey conducted by the Ministry of Construction showed that in the first months of 2006 the problems had not been solved, illustrated by rapid price rises in big cities, bad supply structure and vague market rules, it said.

 

Insiders said the effectiveness of the six new measures depends on whether the local government will implement them fully. Local governments like Beijing and Shanghai are working out measures using the six policies as their guide.

 

The public reacted quickly to the new measures. An on-line survey showed that 77.48 percent would postpone their house-buying plans until the market is clearer.

 

(Xinhua News Agency May 22, 2006)