"To Burst the Real Estate Bubble, Government Must Break Up Land Monopoly" "Demand is high, but there is a lack of supply... It is inevitable that housing costs in major cities will skyrocket."
“To Burst the Real Estate Bubble, Government Must Break Up Land Monopoly” “Demand is high, but there is a lack of supply… It is inevitable that housing costs in major cities will skyrocket.”
With a steep increase in housing costs, concern over a real estate bubble rears its head. Last month, according to the Chinese Research Index on January 6, 100 major-city housing price averages rose to 9715 RMB. That is a 0.23% increase since last November. The steady increase has remained for seven months. In particular, large metropolitan areas such as Guangzhou (1.64%), Shenzhen (1.28%), Beijing (0.53%), Chonqing (0.42%) and Shanghai (0.31%), reflected the highest of the average increased rates.
Professor Mei Jianping of Cheung Kong Graduate School of Business stated, “The metropolitan area of Beijing remains in a situation where the demand is still greater than the supply,” and predicted that because “there are so many wealthy people in big cities, the price of real estate can’t help but be on the rise continuously.” Professor Mei advised for the Chinese government to relinquish its monopoly over land and maintain a constrictive fiscal policy in order to put a stop to rising housing prices. “The provincial government entities are limiting the amount of land to be up for sale in order to keep costs high. Thus, it’s inevitable that prices are on the rise.” He added, “If farmers are given the chance to set their own land prices, the real estate price exploitation will subside, and farmers’ profits would be likely to increase.”
Read the full article here (Korean)
