China’s Central Government Announces Specific Initiatives to Promote Healthy and Stable Development of Real Estate Market
In his report on the Second Session of the 11th National People’s Congress on Mar. 5, 2009, Premier WEN Jiabao stated that it is necessary to actively boost the domestic demand, especially the consumer demand, and to strengthen the role of domestic demand on driving economic growth. According to the report, China will promote the steady and healthy development of real estate market by implementing more vigorous and effective policies and measures to stabilize the market confidence and expectations and the real estate investment and to promote the steady and orderly development of real estate industry.
Firstly, China will speed up the implementation and improvement of the policies and measures to promote the development of low-income housing projects. Efforts will be made to solve the housing problems of 7.5 million low-income urban families and 2.4 million families living in shantytowns in forests, on reclaimed lands and around coalmines within three years, while the Central Government will increase the funding for low-rent housing construction and shantytown renovation and increase the housing subsidies for the central and western regions by an appropriate amount. In 2009, 43 billion yuan/RMB will be allocated for the construction of low-income housing for difficult families; meanwhile, a pilot program will be launched in selected places to use the idle portion of the housing accumulation fund to support the development of affordable housing. Moreover, the public rental housing will be vigorously developed.
Secondly, China will effectively implement the policies of credit, taxation and so on to support people in purchasing houses for the purpose of self-dwelling and promoting living conditions. When meeting relevant criteria, the individuals who apply for bank loans to support the purchase of a second home for personal use will enjoy the similar preferential lending policies applied to the purchase of first home. The Central Government will implement the policy of reducing or exempting the business tax on housing transfers to varying degrees based on the age of the housing.
Moreover, China will expand the consumption and supply of ordinary commercial housing, and increase the credit support for building small and medium-sized condominiums at low and medium prices. Efforts will be made to speed up the development of the second-hand and the rental markets of housing and to strengthen the classified supervision over the housing market. The order of real estate market will be continuously rectified and the real estate transactions be regulated. Due attention will be made to solving the housing problems of rural migrant workers in cities and deepening the reforms of urban housing system so as to meet people’s multilevel housing demand and to strive for ensuring adequate housing for everyone.