Asia

Monday, August 20, 2012 - 01:02

China Cabinet Again Warns Local Govts On Property Market


BEIJING (MNI) - The State Council has again warned that it will hold responsible local government officials who violate the center's policy on restricting housing sales.

The warning came even as the executive decision-making body concluded in a report that local governments have implemented its real estate market policies, and that "speculative demand has been effectively curbed."

The State Council last month sent eight teams into the provinces to investigate how thoroughly the central government's line was being followed.

A Xinhua News Agency report didn't name names, but noted that prices are rebounding in some cities, complicating Beijing's attempts to stabilize prices.

"Some cities have relaxed house purchase limits and offered subsidies to stimulate the property market," the State Council said.

It urged local governments to immediately correct any easing in property measures and said it will hold local officials responsible should easing continue.

The report reflects Beijing's struggles to keep local governments in line on the national housing market policy. Henan province, Anhui's Wuhu and Chengdu in Sichuan province have been slapped down by Beijing in recent months following attempts by local officials to loosen housing curbs.

Local governments have sought to compensate for lost fiscal revenue by loosening Beijing's restrictions which are aimed at limiting purchases to just one property

Property prices rose 0.15% in July, according to a floor-space weighted average of prices in the 35 largest cities calculated by MNI, following June's 0.13% increase, which had been the first rise since June 2011.

The State Council report didn't hint at fresh curbs on housing, saying only that it will "study and improve measures to consolidate current achievements."

Xinhua said in a separate report that technical preparations for expanding the property tax to more than the current two cities are underway.

Early media reports said the central government will unveil more measures to bring down prices should they rise again in July.

beijing@marketnews.com **MNI Beijing Newsroom: 86-10-8532-5998 **

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