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 U.S. dollars) 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.
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."
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.
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