From January to September, the average housing price in China jumped 13 percent over the same period of last year, standing at 2777 yuan per square meter. Residential houses sold at 2566 yuan per square meter on average, up 10.9 percent.

The real estate climate index released by the National Bureau of Statistics on October 25 showed that in September the index was 104.83, down 0.33 point from that in August.

The rising price in the country's property market has sparkled concern and controversy over whether there was a bubble and when the bubble, if there was any, would burst.

Some developers complained that the policy of macro-control pushed the prices of construction materials up which in turn boosted the housing prices. They also attributed the price hike to the policy of open bidding for land transfer which they thought resulted in higher land costs.

The government rebuked the argument. Developers are criticized for misleading customers by hyping up expectation of price hike. For the fear of further price surge, buyers cannot wait to pay tens of thousands yuan of deposit.

Some economists are worried about that a bubble is lurking in the real estate market. This, they think, will undermine the whole economy. But a report by the Ministry of Construction holds different conclusions. It insists that the brisk demand is really here, the vacancy is reducing, and the housing financing is still banks' business of good quality. The ministry thinks that the situation shows the macro-control efforts have paid off in the real estate sector.

But the government also has recognized the necessity of bringing the prices down. Consumers with medium or low income in big cities like Beijing and Shanghai find it is difficult for them to afford their housing. And the spiraling price is not what is expected from the macro-control.

The report of the Construction Ministry suggested that diversified financing channels and securitisation in the housing sector be the way to drag down the housing prices. Some experts also urged more channels of investment for private capital.

By People's Daily Online