SCIO press briefing on Q1 economic performance
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E-mail China.org.cn, April 18, 2017
Financial Times:
Since October last year, the government has provided a very definite policy aimed to deflate housing-market bubbles. We could see the latest data: the 9.1 percent investment growth in the real estate market, much higher than that of the same period last year. Do you think this growth rate could be maintained? Will the tightening policy be tightened further？
Mao Shengyong:
Thank you for your question. We care about the real estate market very much. As for the control of the real estate market, firstly, the fundamental position for the real estate market is very clear. Houses are for living, not for speculating. This is a basic position. The real estate should keep its residential function. Second, in order to achieve this aim, we should establish robust long-term mechanisms for promoting the steady and sound development of the real estate sector. For tax, finance and land supply, we should establish a full set of institutional arrangements. Third, the real estate market is highly regionally demarcated. Some areas, especially the first-tier cities and some hot cities are under big pressure from rising housing prices. At present, there is still excess supply in the real estate market of third- and fourth-tier cities, we should adhere to align measures with local circumstances, implement policies based on city circumstances and local governments should give a better play to take primary responsibility in this respect.
After Sep. 30 last year, some areas have introduced a series of real estate policies, which were aimed to rein in surging housing prices. In March of this year, housing prices rebound turned up in some areas. In order to curb excessively rising housing prices, prevent real estate speculation and risks, we further take some adjustment measures. The new round of adjustment measures was rolled out after March 17, so the effect on the housing prices and other indices of real estate may appear in April and beyond.
Regarding your concern about the real estate market after taking adjustment measures.In the first quarter, the investment in the real estate market increased by 9.1 percent, 0.2 percentage points higher than that for January to February, 2.2 percentage points higher than that for the entire year of 2016. I think there are two reasons: one is that the transacted floor space had an excessive growth last year, and that housing prices increased a lot.
Because the investment in the real estate market is cyclical, so the investment from enterprises into properties lags. In the first quarter of this year, the transaction volume by floor space sales area of commercial properties increased by 19.5 percent year on year. Although it has fallen from the highs of last year, the growth is still fast. The enterprises still have a motivation to invest.
The other one is, seen from the paid-in investment of enterprises, the growth of the first quarter is not bad. But what is the trend of the real estate market investment in the next quarter? We could see from two aspects. On the one hand, sales by floor space have increased rapidly last year, with a high base number. The first quarter of this year has started to fall; the growth rate of the transaction by floor space is much likely to slow down, which may affect the motivation of enterprises investment to a certain extent.
On the other hand, some hot cities have increased land supply, which could help increase real estate investment. I think that the growth of real estate investment in the next quarter still needs observation. Thank you.
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