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By Li Fangchao (China Daily)
Updated: 2007-08-31 07:41

The government will get tough on those involved in illegal activities and speculation to cool the country's booming property market, a leading construction official said Thursday.

"We are in the middle of a campaign to regulate the property market and will crack down hard on anyone engaged in illegitimate activities such as stockpiling land and bidding up prices," Qi Ji, vice-minister of construction said at a press conference.

"We will expose and punish unscrupulous developers and do everything we can to prevent price hikes driven by non-market factors," he said.

Qi said the government will also introduce differentiated tax and credit policies to deter people from buying property for investment purposes and control the demand for large apartments.

Citing Beijing as an example, Qi said one of the key factors behind the skyrocketing prices was the influx of buyers from outside the city.

"Figures show more than a third of the commodity houses in Beijing were bought by people from outside the city," he said.

And the figure is more than 50 percent for high-end properties in central areas, he said.

The situation has led to an imbalance between supply and demand in these areas and prices are soaring, Qi said.

House prices in the capital showed a year-on-year increase of 11.6 percent last month, the highest this year.

Qi said governments must put greater emphasis on the development of low and middle-priced housing and small to medium-sized apartments to stabilize housing prices.

In an effort to help ease the housing problems of low-income families in urban areas, the State Council recently rolled out a series of policies including the establishment of a low-rent system, the construction of more affordable homes and a large-scale program to renovate shantytowns.

Qi said 10 million low-income families nationwide have housing problems, most concerning a lack of living space of less than 10 sq m per person.

"They cannot afford houses on the open market, which is why governments must help them," he said.