BEIJING, May 22 -- A new round of measures by China¡¯s central bank and government ministries to cool the real estate sector is imminent, State media said during the weekend, but analysts had doubts about how effective the steps would be.

    The China Securities Journal said the central bank will soon take targeted measures to curb credit to the real estate sector to flesh out a directive from the State Council, China¡¯s cabinet, earlier last week requiring relevant government agencies to take appropriate steps to rein in overheated sectors of the market.

    ¡°As the State Council has already issued an instruction, the central bank will take measures in the next few days,¡± the paper quoted an unidentified central bank official as saying.

    Further, the China Business News reported that the Ministry of Construction and the Ministry of Land and Resources are also preparing new measures for the property sector. Neither report gave details on what measures could be employed.

    China¡¯s leaders are especially worried about a dearth of affordable housing as developers pour funds into the high end of the market in cities such as Shenzhen and Shanghai. This has led to a growing chorus of complaints from ordinary Chinese about homes becoming unaffordable.

    The official Xinhua news agency said Friday that vacant floor space nationwide at the end of April was up 18.9 percent from a year earlier, underlining concerns over exposure of the banking sector to property lending.

    From January to April, China¡¯s real estate developers invested 413.1 billion yuan (US$51.6 billion) in the sector, up 21.3 percent. They completed 72.81 million square meters of land development, an increase of 57.5 percent.

    Since the beginning of this year, housing prices in major Chinese cities have started to rise again. Housing prices in some Shenzhen districts were up 25 percent in the first quarter compared with the same period a year ago.

    Chinese citizens with low incomes have complained about the high prices and there is even a ¡°non-buying¡± campaign in Shenzhen, where commercial housing prices have surpassed 10,000 yuan per square meter within the special economic zone.

    Annual property price inflation across 70 cities in China slowed to 5.4 percent in March from 5.5 percent in February, official data shows. But prices in some hot markets have been rising much faster, a survey by the Ministry of Construction said Saturday. It said the prices of newly built commercial housing in 11 cities increased more than 7 percent in April. The figure exceeded 10 percent in three of these cities. Most of the hot markets scatter in major cities in the Pearl River Delta, Beijing, and the Bohai rim. The ministry attributed part of the property market imbalance to the policies of some local governments.

    To address these concerns, the Cabinet called for steps after a Wednesday meeting including ¡°an adjustment in credit policy¡± and for localities to increase the number of low-cost, small-sized housing units available to low-income residents.

    But analysts remained skeptical about the effectiveness of the policies or whether they went far enough.

    ¡°The measures do not address the root causes of the property bubble,¡± Andy Xie, greater China economist with Morgan Stanley in Hong Kong, wrote in a note. ¡°Excess liquidity, due partly to currency appreciation expectations, and the dependence of local governments on property for revenue are the root causes of the bubble.

(Source: Shenzhen Daily/Agencies)