Page last updated at 04:17 GMT, Monday, 11 January 2010

China orders low-cost housing against property bubble

By Chris Hogg
BBC News, Shanghai

A Chinese woman walks past a property sales office at the Central Business District in Beijing
The Chinese government is offering incentives to homebuyers

China's city governments and ministries have been told to build more low cost housing.

They have also been ordered to push property developers to complete projects more quickly in order to help ease property prices.

The directive has come from the country's cabinet, the State Council, amid fears of a property bubble.

It also says it wants to prevent speculative foreign investment pushing up prices even further.

China's leaders are worried that house prices in many cities here are rising too fast now.

Hot money

If too many Chinese are priced out of the market, it could stir economic and social instability.

Last year China's banks issued $1.5 trillion (£932 bn) worth of new loans to help ease the country through the financial crisis.

It is thought around a sixth of the total flowed into the property sector and there are some here who worry it is now overheating.

The new directive from the State Council sets out measures to try to increase the supply of smaller, cheaper homes for families on low incomes.

It also urges financial institutions to promote measures that encourage first time buyers but discourage those who want to purchase a second home for investment purposes.

It says there should be a crackdown on property developers who hoard land to try raise prices in an area.

And it wants to stop so called "hot money" from flowing into the country.

This is cash from foreign investors who see the rising prices here as an opportunity to make money.



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC iD

Sign in

BBC navigation

Copyright © 2016 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific