Taming policies urged not to loosen as housing market begins to cool down

The recent protests staged by homeowners in some cities against price cuts have aroused people's concern about whether the government should readjust its policies on the housing market. Analysts urge that the taming policies should not loosen under such circumstances. Last week, hundreds of homeowners flocked to the sales office of a property project developed by the Longfor Company in Shanghai to seek refunds or purchase cancellations after big discounts were offered by developers to boost sales. Similar episodes have been reported in the cities of Beijing and Hangzhou, where housing developers, pressed by a financial crunch and a sales slump, have been forced to spur sales by cutting housing prices. "If the property developers have to compensate the home buyers after the price drops, should they ask for more profits when the prices go up? In the home sales transaction, it is necessary to abide by contract clauses," People's Daily, the country's leading newspaper, commented Friday. Even so, it is unfair to blame the home buyers only since they bear enormous pressures and risks under the current housing market with high prices and unreasonable pre-sales regime, but they will never work things out by demanding their money back or even using violence, the paper continued to say. While the government should shoulder more responsibilities to supervise the housing market, it is not an option to just halt price drops when complaints appear. Since the housing market control has entered a key phase, halting price cuts might lead to a total failure of the government’s previous efforts, it stated. A report published by China Securities Journal the same day said the recent incidents are disturbing the thorough implementation of the taming policies concerning the housing market. Housing prices might rebound and bring hidden trouble for China’s economic development if the government pursues a halt of price drops now. China's government has been pursuing a series of policies to curb the runaway housing market, including purchase limits, higher down payments, the introduction of a property tax in some cities and construction of housing projects for low-income people. The policies have been gradually taking effect, with the turning point of the housing prices looming amid steep discounts. Official statistics showed that only 1,039 housing units were sold in Beijing during the National Day holiday, including 908 new homes and 131 second-hand ones, down 22.8 percent over the same period last year. Shanghai also saw a significant slump in home sales during the holiday. Daily housing sales in the city stood at about 100 units, while in the major cities of Guangzhou and Hangzhou, sales figures remained at only two digits. According to the report, some insiders doubted that the protests staged recently might be a trick of the property developers to force the government to loosen its policies. The central government has made a clear attitude on maintaining the taming policies, the report said. Premier Wen Jiabao urged governments at all levels to consolidate the achievements of the taming measures as the housing market control and construction of the affordable housings have entered a key phrase, during an inspection tour to Nanning City in south China's Guangxi Zhuang Autonomous Region last week. Price drops in the housing market hurt the investors the most, the property developers and the local government relying on land profits, instead of the common people. Only the taming policies are kept consistent, can the property market develop healthily and steadily in the future, the report said.