Three key imbalances have caused the unreasonably high prices afflicting China’s real estate sector, Zhang Tao, the vice director of the People’s Bank of China’s research bureau, told a real estate conference over the weekend, the China Securities Journal
reported. “The imbalances between demand and supply, between commercial and budget housing, and between sale prices and rentals are the major causes of high property prices,” Zhang said. He said Chinese people tended to buy rather than lease residences while wealthier people were now buying second or third properties as investments. Together, this had led to a rapid rise in prices but a stagnant leasing market. “A recent survey found the prices of apartments for sale in some 13 cities have grown 21% over the past three years, compared to an 8.2% gain in rentals during the same period,” Zhang said. He said the government needed to be more visionary in its real estate policies and to be more responsive to market changes. He also called for more low-cost housing for low income families.