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Housing market on a sound footing, says Shenzhen mayor
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By Yuan Fang
China.org.cn staff reporter

Shenzhen's housing market still remains healthy and local government will not implement any support measures in the near future, said Xu Zongheng, mayor of Shenzhen, on Sunday in a fringe-meeting alongside the annual NPC session.

Xu Zongheng, mayor of Shenzhen, talks to reporters on Sunday in a fringe-meeting alongside the annual NPC session. 

Shenzhen's property prices, which formerly led the country's property price surge, are now taking the lead in term of falling prices. In January housing prices in the city experienced a decline of 16.3 percent year on year, while in the country's 70 major cities overall prices fell 0.9 percent, according to figures from the National Development and Reform Commission and the National Bureau of Statistics.

Despite the roller-coaster fluctuations, Xu believes that the local housing market still remains on a sound footing.

In the first two months of this year, land supply to property developers reached 890,000 square meters – a year-on-year increase of 175 percent – and new house sales gained 106 percent to reach 780,000 square meters, according to Xu. Average property prices now stand at 11,000 yuan per square meter, he said.

Of the city's outstanding loans, totaling 1.25 trillion yuan, individual mortgage loans form the largest portion with 240 billion yuan, and property developers account for 140 billion yuan. "Based on our monitoring and analysis, these loans are all low-risk," Xu guaranteed. "These figures are signs of recovery and the market is still safe and sound," he said. "There's no need for the government to support the market for the time being."

Regarding some city government measures to stimulate the property sector, Xu remarked: "Every city has its own characteristics in its property sector, and individual measures are justifiable in the context of a city's local development."

Starting from the second half of last year, some local governments began to announce their own support policies to stimulate their property sectors as grim economic conditions and future uncertainties severely dampened demand. However, Xu believes, housing prices must fundamentally be determined by the market. The government's role should be focused on effective land supply, increasing the supply of low-cost housing to ensure people's basic accommodation requirements, and regulation of property developers to ensure their practices confirm to laws and standards.

(China.org.cn March 10, 2009)

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