China to avoid drastic price decline in property market

Dec. 29, 2008 (China Knowledge) - China should avoid sharp fall in housing price, though a modest fall in housing cost may help sustain a healthy property market in the long run, sources reported, citing Zhang Mao, the vice minister of the National Development and Reform Commission (NDRC), China's top economic planning body.

According to Zhang, drastic fluctuations in real estate market may have severe negative impacts on the nation's economy, and a drastic price decline should be prevented. 

The Chinese government has unveiled a series of measures to spur the property market, said Zhang, adding that the government will build more houses for low-income families and tighten control on excessive gains in land prices.

Earlier this month, the State Council rolled out new stimulus policies to boost the sluggish property market, including tax cut in real estate sales and relaxation in mortgage policies for second-home buyers. In addition, domestic commercial banks are also encouraged to increase loans for developers and low-price housing.