Home prices in some of China's major cities, such as Beijing, have more than doubled over the past two years due to easy credit and low lending rates.
With just several days to go before deadline, China's first-tier cities- Shanghai, Beijing, Guangzhou and Shenzhen- finally broke the silence and released their targets for home-price control in 2011.
On March 28, Shanghai announced its target for curbing the growth rate of housing prices in the city this year. The Shanghai government promised to keep the growth rate of home price in new homes lower than that of the city's gross domestic product (GDP) and per capita annual income of local residents'. The city also pledges to make sure that the total area of newly built government-subsidized homes exceed that of commercial housing projects.
Following Shangha, Beijing, Guangzhou and Shenzhen also released their home price control target on Tuesday.
The Beijing municipal government proposed that its housing prices will be held stable with a slight decline in 2011, the first city to make a commitment to reduce property prices. Experts believe Beijing's target showed the city's resolution to contain surging home prices.
Just like most cities that released targets, Guangzhou also chose to use growth of GDP and residents' income as the upper limit for the price increase rate of city's newly-built homes. New homes refer to commercial properties, price-limited housing projects and affordable houses that completed construction within the year, the city government said.
Shenzhen, on the other hand, announced to keep the growth of the city's new home price index lower than its GDP and residents' income growth rate. The new home price index is caculated by using contract prices recorded by local goverment's property regulation authorities as data sources.
As of March 29, only about 70 cities in China had released their 2011 control targets for home prices. The State Council, China's cabinet, ordered local governments across the country to disclose their annual targets for price control by the end of the first quarter.
