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Soaring Housing Prices
    2007-06-11 15:34:31     CRIENGLISH.com

The number of students sitting the college entrance exam this year is above 10 million. Does this number have something to do with rising house prices? Yes, according to an article published in New Express. Its author predicts the price of real estate will remain high because of the demographic structure of the Chinese population.

Predictions about housing prices never end.
       
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One opinion posted on Xinhua.com says it is true housing prices are determined by the market rule of supply and demand. However, the abnormally high price level of real estate in many cities in recent years can not be explained by the great number of young people and the great demand they produced. There are many other responsible factors.

The author points out the government should enhance supervision on housing prices and guide the real estate industry to focus on ordinary housing for the masses. And it is very likely more people will have rational incentives to rent an apartment instead of buying one. Therefore, it is possible to maintain housing prices at a reasonable level.

An article on Renmin.com argues that there are obvious signs of speculation in the market. A large number of investors are believed to be hoarding housing to profit from future price increases. They have distorted market supply and demand to push up prices.
       
It is a common phenomenon facing many developing countries where the price of newly-built houses in most cities is beyond the reach of most citizens. The only solution to this problem is to let the majority of society get richer. Then the change of the demographic structure of population will not influence prices.

Another opinion from an article in China Youth Daily says, the large number of young people is only a smokescreen to justify the price. A notable reason for soaring house prices is a large number of houses in many cities are left in the hands of developers or controlled by some speculative investors.
       
Housing is different from other commodities in the market. The government should ensure most people have a place to live in.

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