Xiao noted that in July 2009, when the government made minor adjustments to housing policies, the ratio of property transaction volume to new properties approved for pre-sale was 1.78 in the 14 cities Vanke focused on. The figure indicated that market supply was unable to meet the demand.
The current situation that new properties are in short supply was the result of low housing starts in 2008, said Xiao.
In July and August 2009, house transactions declined in some cities. Xiao pointed out that weak supply and policy adjustments were the main reasons.
People’s Daily Online reported him as saying: "Markets in first-tier cities were affected by housing loan policies and price surge earlier this year, while second- and third-tier markets were the victim of short supply."
Xiao believed that policy adjustments made in July would help to build a stable property market.