Debates on China's house prices

On the sideline of the Bo'ao forum, China's soaring house prices have aroused heated debate. What caused the price hike and will the latest government measures help cool it down? Real estate tycoons, government officials and scholars offered their opinions.

In the first quarter of 2010, the housing price inside Beijing's fourth ring averaged over 30 thousand yuan, or over 4000 US dollars per square meter.

You have to look really hard to find a house under 10 thousand yuan per square meter in Beijing now.

The situation has stirred heated debate at the Bo'ao forum.

SOHO China President, a real estate tycoon, Pan Shiyi says the banks' loan policies are a crucial factor. The most effective way to curb the price hike is to make it harder for developers to get credit from banks and make it easier for ordinary people to get a housing loan. He also suggests significant rises in property management tax.

Professor Chi Fulin from China Institute of Development and Reform says property management tax is almost non-existent. It gives rise to speculative house buying. Also the land bidding system has led to rising land prices. Chi Fulin also points out that a major source of income for local governments is selling land to developers. That, inevitably causes corruption.

Chairman of China Banking Regulatory Commission Liu Mingkang, says regulations on purchasing a 2nd apartment should be stricter. Some banks in Beijing have raised the down payment for 2nd apartments to 60 percent.

Huayuan Property President Ren Zhiqiang commented on a recent government order for 78 big state owned enterprises to withdraw from the real estate sector. Because those SOEs'main business is not property development. Ren Zhiqiang says the price will not go down even after these big SOEs quit. Some 16 SOEs whose main business is on real estate development were not ordered to withdraw.