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Home Prices to be Part of Performance

Home Prices to be Part of Performance


    Officials' ability to keep real estate prices stable and affordable will be a major criterion in deciding their performance and career prospects, a senior Ministry of Housing and Urban-Rural Construction official said yesterday.

    "We should be setting up an accountability system for governments and officials soon," Shen Jianzhong, the director of the real estate department of the ministry, said at a press conference of the annual session of the National People's Congress (NPC), which ends today.

    The newly approved ministry, to replace the Ministry of Construction, is responsible for realizing China's new housing policy targeted at "ensuring everyone is sheltered".

    Shen said local government officials should monitor housing prices to prevent price volatility and ensure that homes remained affordable, but he did not provide details of the accountability system.

    The country currently has in place a system to track the performance of governments and officials in managing work safety, family planning, energy saving and emissions control.

    Late last year, the government announced a new system for measuring performance, which ties career advancement to success in achieving environmental targets.

    Under these new rules, if company bosses or government officials fail to meet half the national goal of reducing energy consumption per unit of GDP by 4 percent annually, they will lose the opportunity to be promoted.

    Shen said the country is still faced with mounting pressure from real estate price hikes as supply cannot meet rising demand.

    "The land available is limited, which has a big impact on housing prices," Shen said.

    He added that the role of the government was to allocate adequate land to build low-cost housing with price caps for the poor and middle-income families.

    "When their demands have been satisfied, that will help decrease the number of buyers and be helpful in curbing the rise of housing prices," he said.

    Qi Ji, the vice-minister of construction, said the central government has decided to allocate 70 percent of land supply this year to build homes for middle- and low-income families and the needy.

    Citing Premier Wen Jiabao's work report to the NPC, Qi said China plans to earmark 6.8 billion yuan (0 million) in its 2008 budget to build low-rent houses for the urban poor in the western and middle parts of the country. The amount is 1.7 billion yuan, or 33 percent, more than last year.

    "Local governments are also required to increase funding in this area," Qi said.

    With a large population and relatively little land available, Qi said the country has to turn to small- and medium-sized homes that are environmentally friendly to conserve energy and land.

    Housing prices have soared in the past few years. Average property prices in the country's 70 large- and medium-sized cities last December were up 10.5 percent from the same month of the previous year, while in Beijing it was up 17.5 percent, figures from the National Development and Reform Commission showed in January.  (By Fu Jing)