Stricter controls possible on China's property market

Stricter controls could be imposed on China's property market after house prices in some cities went up faster than expected, Shanghai Securities Journal reported Wednesday.

The report cited an anonymous source close to the Beijing Municipal Commission of Housing and Urban-Rural Development as saying that major cities such as Beijing are "basically sure" to announce new measures in the near term, including restraining demand and creating higher purchase barriers.

These new measures will probably be announced before early March, when the country opens the year's major political meetings, the report said.

After a short-lived cool-off in 2010, the housing market began to recover last year as the Chinese government tuned its policy to more emphasis on economic growth.

In December 2012, 54 of a statistical pool of 70 major Chinese cities, up from 53 in November, recorded higher new home prices than a month earlier, according to the National Bureau of Statistics. This marked a third consecutive month of such increases.

Housing transactions have also increased after demand picked up for fear of further rises, as evidenced by long queues in the transaction halls in Beijing.

The recent development has fuelled speculation that the government may introduce fresh measures to dampen the market and ease public complaints.

"If the government does not escalate controls, prices in some major cities will run out of control," said Yang Hongxu, vice president with Shanghai-based R&D Institute of E-house China.

Chinese housing authorities have not yet signalled any clear movements but said they have enough policy reserves in times of need.

"Until recently, government authorities have basically agreed that home prices in certain cities have grown too fast," said the source with the Beijing housing authorities.

Market analysts have listed several policy possibilities, such as banning loans from public housing funds and raising the down payments for second-home buyers.

However, an unnamed person with the Ministry of Housing and Urban-Rural Development said the ministry has not researched on banning loans from the public housing funds.

Other measures may include raising transaction-related taxes and increasing land supplies, according to Yang.

He said the new policies will be more targeted in some major cities in consideration of regional differences.

"Coordinated efforts from the ministries and departments are needed to bring the price rises under control," he said in the report.