2016年CRI Deputies Discuss Uneven Home Market Recovery

Reducing housing inventories 1 has been set as one of the five main goals of the supply-side structural 2 reform program established at this year's Central Economic Work Conference.

Deputies attending this year's National People's Congress have been recommending that any policy shifts need to be based on local conditions.

Calls are also being made to try to bring market speculation 3 under control.

Communist Party of China Shanghai chief Han Zheng, a member of the National People's Congress, says addressing the issue in his city requires a dual-track approach.

"Because Shanghai has a population of more than 24 million, we need to deal with two different issues to try to make adjustments: These areas include the market and the law. The local housing market in Shanghai needs to be convinced to focus on allowing people to find affordable 4 homes. When it comes to the law, we should be taking steps to try to ensure low-income families are given every opportunity to access housing. Anyone found shutting people out of affordable housing in an illegal way should be punished. This is what will guarantee a healthy and stable property market."

Traditionally, housing in China has been considered a safe investment, compared to the stock markets or other investments.

While the market has been sporadic 5, housing prices appear to have bottomed out in the second-half of last year after declining for well over a year.

Home prices in the southern Chinese city of Shenzhen surged nearly 52 percent in January.

Prices in Shanghai increased close to 18 percent.

But while property prices appear to be rebounding 6 in the major centers, stats suggest the property market in the smaller centers - the 2nd, 3rd and 4th tier cities in China - have not kept pace.

The uneven 7 recovery is prompting suggestions that the government needs to take a more targeted approach to its stimulus 8.

NPC deputy Lv Wei.

"Right now inventory 9 reduction should be focused on the third and fourth-tier cities. Big cities like Beijing, Shanghai and Guangzhou should be focused instead on ensuring the properties that are available are affordable. Steps need to be taken to try to prevent people from taking advantage of broad-based government stimulus packages. If we open up too many options, people are going to take advantage. This is going to lead to another round of overheating in the property market."

Another concern being raised is the availability of financing.

Huang Qifan, Mayor of Chongqing, is suggesting there needs to be regulations on non-bank lending when it comes to down payments.

"Property developers or their agents have been too active in providing loans to home buyers to cover their down payments. This could lead to a large-scale investment bubble. We don't want another situation like we say in the United States with the subprime mortgage crisis. Inventory reduction and structural reforms are what's needed."

It's being reported authorities are working on legislation to eliminate non-bank lending for down payments in China.

The subprime mortgage crisis in the United States saw companies engage in predatory lending, convincing would-be home-buyers with little equity 10 to purchase homes on contracts which would require a massive 'baloon payment' after a certain period of time.

Credit defaults from this practice were the stimulus for the global financial crisis in 2009.

For CRI, this is Luo Bin 11.