Stability Is Key to a Healthy Housing Market.docVIP

Stability Is Key to a Healthy Housing Market 　　The Central Economic Work Conference which took place in December 2016 pledged to curb real estate bubbles.“Houses are built to be inhabited， not for speculation，” said a statement issued after the statelevel policymaking meeting. Moreover， the government plans to use a variety of methods to establish market-oriented and long-term mechanisms which suit conditions in China in order to prevent erratic market fluctuations. 　　Stability is key to establishing these mechanisms as soon as possible， and to keep them running in the long term. Related policies must be stable， continuous and consistent. 　　Real estate used to be a pillar industry in many regions because of its high investment returns and fast capital turnover rate. But the industry has also faced many problems. For instance， some local governments are highly dependent on revenue from land sales. Also， housing prices have soared because of a surge of speculative purchases by individual buyers. Currently， a number of middle- or low-income people cannot afford homes or have to pay inordinate amounts of money to buy a house. Worse still， some local governments―fearing that the economy might be pulled down by a cooling real estate market―relaxed， or adjusted， existent regulatory policies shortly after the previous round of price hikes had ebbed. As a result， housing prices in some large cities started to grow once again. 　　Past experiences and lessons indicate that the government must uphold a long-term perspective and maintain stable policies to ensure the sound development of the real estate industry. It must also pay attention to current market conditions and make related policies work in accord with each other. 　　First， there should be mechanisms to distinguish real housing demand from speculation. Because of large-scale speculative purchases based on high leverage ratios， the inelastic demand for housing in society has not been met satisfactorily. Therefor