Market

Property market cools in Hainan: official

(Xinhua)
Updated: 2010-08-07 09:06

SHANGHAI - The runaway trend of soaring housing prices in China's southern island province of Hainan has been reined in thanks to a series of local government policies, a provincial housing official said Friday.

Hainan's housing prices had fallen from an average 14,000 yuan ($2,059) per square meter last year to about 8,000 yuan, Cai Renjie, deputy director of Hainan's housing department, said at a press conference on the sidelines of the Shanghai World Expo.

Prices soared alarmingly after China's central government in January announced that Hainan was to be developed into a global tourist resort by 2020.

Prices averaged around 6,200 yuan a meter last summer, said Cai at an event to promote Hainan as an international tourist destination and to launch Hainan "culture week" at the Expo.

The fast expansion of the real estate market on the island earlier this year sparked fears that the island might repeat its boom-bust property trajectory of the 1990s.

Fearing speculation, the central government introduced a series of policies to curb housing prices, including steeper sales taxes and more affordable housing.

"The current price is relatively low compared with other large Chinese cities," Cai said.

Related readings:  More realty curbs unlikely: experts  Stress tests to test lenders  Stress tests not signals of policy change: CBRC  China widens stress tests to steel, cement - media  Realty trouble in the offing  China realty still a good bet

However the real estate sector was a "foundation" for economic development and it was still gathering momentum, he said.

He said the provincial government had drawn up a mid-to-long-term guideline for the development of the sector, with specific finance, tax and other related policies, which was "rare" among Chinese regions.

Cai said the central government's macro-control policies and local efforts to curb real estate prices would "certainly boost healthy development of the island's real estate industry."

Also at the press conference, Xu Zhenling, deputy director of Hainan's culture and sports department, said the island was to have a trial run of "instant lotteries" at the end of October.

However, Xu noted that "guessing" lottery tickets will not be offered because "the operation mechanism has not been thoroughly researched yet."

According to a draft guideline (2010-2020) to develop the island, released by the State Council in January, the country would introduce international sports and entertainment activities and explore methods to promote local lottery.

It also is considering extending tax-free services to domestic tourists to boost consumption. Ni Jian, Hainan government's deputy secretary-general, said the tax-exemption policy for domestic visitors was "still under discussion with relevant central ministries."

Hainan has about 1,528 kilometers of coastline, about half of which could accommodate construction. It was designated a province in 1988 and became China's largest special economic zone the same year, enjoying preferential development policies.

The 35,000-square-kilometer island, with about 8.7 million permanent residents, boasts year-round sub-tropical beaches, forests and diverse ethnic cultures.