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China's Housing Market Still in Good Shape: Ministry
   2016-03-15 19:38:18    CRIENGLISH.com      Web Editor: Li Shaotong

Chinese homebuyers look at housing models at the sales center of a residential property project in Yichang city, central China's Hubei province, 5 July 2015. [Photo: Imagine China]

On the sidelines of the ongoing annual session of the National People's Congress, senior Chinese housing officials met with the press on Tuesday. They expressed confidence in China's housing market, in addition to stressing the importance of upgrading the country's shanty areas.

CRI's Victor Ning has more.

 

China's Minister of Housing and Urban-Rural Development Chen Zhengao says the country's real estate market faces opportunities as well as challenges.

"We should take the main features and basic conditions into consideration when evaluating the situation and predicting the prospect of the real estate market. There are three main features. The first is that sales are stabilizing and picking up. The second is a polarization of conditions between first-tier and less developed cities, which has become increasingly more serious. The third is a huge inventory, which is mostly found in third- and fourth-tier cities."

Chen says that sales in the housing market in 2015 witnessed month-by-month increases, and the momentum was maintained in the first two months of this year.

However, while the real estate sector has enjoyed robust growth in China's first-tier cities, less developed cities have not shared the same experience. Chen said the increasing gap has posed challenges for authorities to regulate the market.

Despite these conditions, Chen says one should be fully confident about the steady and healthy growth of the country's housing market.

"First is that the long-term positive fundamentals of the Chinese economy remain unchanged; second is that China's urbanization process remains unchanged; third is that the housing demand of residents, and especially new urban residents, remains unchanged."

Chen added that other encouraging factors include the strong leadership of the Communist Party of China and the Chinese central government, China's macro-regulatory measures, and the implementation of these measures by local governments.

When asked whether housing prices will plummet in China as they did in Japan in the 1990's, Chen says China's market will not collapse, as the comparison was based on different historical and national conditions.

"About this problem, I have consulted some experts. What I want to say is, first, we are in different times. That happened in Japan 20 or 30 years ago. The background, political and economic conditions have changed a lot, even completely. Secondly, we have different national conditions. China and Japan have different levels of urbanization, different stages of economic development, and different macro control measures. Therefore, you can not effectively compare the two."

The housing prices in Japan tripled between 1985 and 1991, before starting a downward spiral.

Meanwhile, China's Vice Minister of Housing and Urban-Rural Development Ni Hong says the country will push forward the renovation of shanty areas.

"Last year, the government proposed a three-year plan, aiming to complete the rebuilding of 18 million run-down houses. We aimed for 5.8 million in 2015, and finished at 6.01 million. The project is being conducted with unprecedented scale and vigor."

The central government's latest work report said China should begin constructing another 6 million units of renovation housing in 2016. Ni said the ministry is confident in accomplishing that task.

The Vice Minister says renovating shanty areas enables millions of people to move out of shabby houses and into new ones, while it also upgrades cities' appearances and stimulates consumption.

For CRI, I'm Victor Ning.

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