There are no widespread asset bubbles in China, and slapping property tax in more cities is not easy as it looks, said Li Tie, the head of Urban and Township Development Center of the National Development and Reform Commission, China's top economic planner.

High home prices in China's largest cities are driven by scarce public services there; that is to say, home buyers there actually wanted to purchase these public services, such as healthcare and education, Li said at the World Economic Forum – Davos 2013.

The arguments about China's housing bubbles are based on the criteria used in western countries but China's population and income conditions are totally different, Li said, adding that there are no across-the-board bubbles in China despite some local and regional problems.

Talking about imposing property tax in more cities on top of Shanghai and Chongqing, where a pilot program kicked off in 2011, Li said it is difficult to carry out with an agreed rate because land in China is only rented with no private ownership. Unlike those in Europe and America, local governments in China are not eager to levy property tax.

Li proposed developing small rather than big blocks to supply low-cost homes for buying and renting to check the spiraling prices. Property buyers in China prefer reselling to renting due to cheap rentals and unstable sources of tenants, particularly in Central China, according to Li.

Previous data from the China Index Academy showed home prices have risen month on month for 15 months in a row across China.

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