The latest China Property Market Report predicts that housing demand will continue to be high this year, and the interest rate for property loans is expected to rise.

The report released by China's Academy of Social Science states the Chinese government's macro control policies were effective in curbing the increase of the housing supply last year, leading to property price hikes.

It says the major goal of the macro control policy should be slowing investment in real estate and not affecting housing prices.

Last year's housing price hike resulted from many factors, including higher land costs, higher construction material prices, more luxury houses being developed and speculation activities in real estate.

And the solution for low-income residents' housing problems lies in the social security system and not the macro control policy.

The report also forecasts investment growth in real estate will slow down in 2005, but will not be less than 20 percent.

Meanwhile, property credit loans will also increase slowly and the interest rate for the loans may also rise again.

And housing demands will still outstrip supply this year. But housing price increases will slow under government efforts and market self-regulation.

(CRI April 8, 2005)