Dong Zuoji, director of the land planning department of the Ministry of Land and Resources, believes that China should prevent home prices from long-term "abnormal increases" and divert profits from home sales to the public through taxation. This is probably not a widely popular view.
He said home prices will continue to rise because land in the world’s fastest-growing economy is becoming increasingly scarce. Therefore, he suggested, the government should use taxes to give the added value of the land back to society.
Dong Zuoji said the government will increase land supply for subsidized homes and adopt measures to prevent developers from hoarding land. The government will also guarantee land use for high-tech, high value-added enterprises.
The National Development and Reform Commission said early this week that due to a series of support measures adopted by the government, China’s property sector rebounded strongly this year. Housing prices in 70 major cities jumped 3.8% last month, the biggest year-on-year increase since September 2008.
Shanghai Daily reports Ma Ji, head of research at Shanghai Centaline Property Consultants Ltd, one of the city’s leading brokerage chains, as saying, "Demand for properties remained robust across the country as inflation expectations, coupled with a possible inflow of ‘hot money’ from overseas, have made real estate investment extremely active since the second quarter of this year."