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Real Estate Sector Cooling down: Official

Figures in the January to May period indicate China's overheated real estate sector is cooling down with industry insiders saying the government's macro controls are taking effect. They say the fast-growing real estate sector is back on track for healthy and rational development.

Investment in China's real estate sector exceeded US$120 billion in 2003, up 30 percent year on year. Investment maintained its momentum in the January to April period this year, and pushed the growth rate to nearly 35 percent. The fast growth not only leads to an increase in the price of raw materials, but also puts other pressures on the country's overall economy.

The government moved to adopt various measures to prevent a real-estate bubble. And figures suggest that these measures began having a measurable effect in May. Investments, bank loans, the number of new projects and housing prices are all showing an overall decline.

Xie Jiajin, Deputy Director of the Real Estate Department of the Ministry of Construction, said, "The government's macro economic control has successfully curbed much of the speculation in the real estate sector. And the measures have also helped house prices come down to a more reasonable level."

Tighter supervision of bank loans and land control were the two major measures taken by the government to cool the fast-growing real estate sector.

Bank loans to the sector dropped to less than US$200 million in May, down from the US$2 billion in the previous month.

However, experts also warn, though the housing prices will stabilize in the coming months, there's still a possibility of a slight price increase in the future.

(CCTV.com July 7, 2004)

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