Beijing Intensifies Effort to Curb Rising Home Prices

1. HANGHAI — China released several government measures on Wednesday aimed at curbing the growth of housing prices and preventing a property bubble from threatening its fast-growing economy.The State Council, China’s cabinet, ordered cities to better manage the supply of land, raise tax rates on the sale of apartments or houses held for less than five years and set price control goals for new homes. The government also said it would raise the minimum down payment for buyers of second homes to 60 percent from 50 percent. The measures were released on the council’s Web site late Wednesday, after a meeting led by the prime minister, Wen Jiabao, China’s top economic planner. The announcement represents Beijing’s latest attempt to gain some control over one of the nation’s most contentious issues: the affordability of housing and the prospect that soaring property prices could endanger the country’s economic boom.

2. In its release, the government said that its policies were already working and that surging property prices had been “contained since last April.” But challenges remained in a market that the government said was being driven up by speculators, the release said. Several major Chinese cities, including Shanghai and Chongqing, are considering experimenting with a property tax that would be aimed at speculators and help reduce the reliance on land sales for income. For much of the last six years, housing prices have skyrocketed in China’s coastal cities and even in inland provinces as the country has embarked on a major urbanization drive. In Shanghai, for instance, some apartments are selling for the equivalent of $10 million. The steady rise in housing prices has created a scramble by developers to acquire land. Many of China’s newly minted billionaires are real estate developers. But even state-owned companies are snapping up large tracts of land as speculative investments or to build luxury high-rises.

3. Beijing is increasingly worried about developers, often assisted by local governments, who illegally confiscate land, and about the growing anxiety among the public about the loss of affordable housing.Beijing also worries that its major state-owned banks could be at risk if the property market collapsed. The government has announced plans to build more affordable housing in major cities, but it has had only minor success in preventing property prices from rising. Government controls have seemed only to slow the rise of housing prices temporarily over the last six years. And then, after a while, they start soaring again. Many buyers believe that the government will not get too tough on the market because local governments depend on land sales for a significant portion of their income, so they have a strong incentive to keep prices high. Last year, according to the government, nationwide land sales rose 70 percent, to more than $400 billion. In its announcement on Wednesday, the government said it would set up an accountability mechanism and further regulate and control the property market.

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