Social housing to join fray

In response to public complaints about soaring property prices, the State Council earlier this year unveiled an ambitious housing plan. The plan called for the construction of 10 million subsidized housing units, including affordable homes, low-rent residences, price-capped homes and public rental housing this year. The number of subsidized housing units planned to be built during the 2011-2015 period will total 36 million units.

The plan aims to bring subsidized housing coverage to 20 percent in China's urban areas by 2020.

According to the latest statistics from the Ministry of Housing and Urban-Rural Development, construction on 98 percent of the subsidized housing projects planned for the current year had begun by the end of September. Construction on the rest of the projects is scheduled to begin before the end of November.

Minister of Housing and Urban-Rural Development Jiang Weixin said the apartments to be constructed this year include 1.65 million low-rent apartments, 1.10 million low-income apartments and 2.27 million public rental apartments.

Although a series of problems have emerged in the process of implementing the plan, including poor construction quality and misconduct in the application process for living in the homes, experts said the housing plan will boost supplies and alter the landscape of China's property market.

"If supplies of subsidized housing grow steadily, the combination of commercial housing and subsidized housing will shake the foundation that has created the high prices," said Wang Pei, a property analyst from the CEBM Group Ltd, an independent investment advisory firm.

Volatility remains

It appears that the government's policies have begun to slow down the expansion of China's housing bubble.

In September, 59 cities out of a statistical pool of 70 major cities saw new home prices increase more slowly from a year earlier, compared with 40 cities in August, the NBS said in a report on its website.

On a month-on-month basis, 17 cities saw declines in new home prices in September, up from 16 in August. Meanwhile, prices in 29 cities remained unchanged, the report said.

Although recent signs in the property sector all point to a desired downward trend, experts cautioned that the sector remains volatile.

Song said the real turning point in the market will come only when buyers feel a "proper adjustment" in new and second-hand housing prices, although it is hard to say whether a "proper" price range will be found. He also cited China's high inflation rate and imported inflationary pressure from other countries as potential risks.