Too early to loosen China's property controls

Edited and translated by People's Daily Online

China's real estate controls are paying off. It should be noted that it is not the right time to end the property cooling measures now that housing prices are finally starting to fall.

Prices still too high

The purpose of the cooling measures is to "bring home prices down to a reasonable level," but the country's housing prices remain obstinately high, with major indicators such as the home price-to-income ratio and price-to-rent ratio still beyond a reasonable level.

Housing prices are still likely to rebound due to certain factors. Only by constantly improving and effectively implementing property cooling measures will the Chinese government achieve its goal of bringing home prices down to a reasonable level.

Furthermore, China has just started establishing a sound housing supply system as well as reforms concerning land sales, taxation, and related laws and regulations. If the country now loosens property controls after initial success, its real estate sector will return to the old path, housing prices will inevitably rebound, and all its past efforts to regulate the real estate market will be in vain.

At this critical juncture of regulation, Premier Wen Jiabao and Vice Premier Li Keqiang recently re-emphasized that the real estate market regulation should be executed resolutely without any hesitation. This has relieved people's nerves.