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China Urges Local Governments to Control Soaring Housing Prices, Amid 
Warnings of Possible Correction

*By Elaine Kurtenbach* The Associated Press
Published: Sep 21, 2004

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SHANGHAI, China (AP) - China's construction ministry has warned local 
authorities to curb soaring real estate prices, amid warnings by some 
analysts that the market may be headed for a correction.

The ministry urged local officials to boost the supply of low-cost 
housing, saying a shortage of affordable homes has left the market 
unbalanced and driven prices higher, the official Xinhua News Agency 
reported Tuesday.

The average housing price nationwide in the January to August period was 
255 yuan ($30) per square foot - up 13.5 percent over the same period 
last year, it said.

Prices in major cities have risen much higher, much faster, with the 
average housing price per square foot in Shanghai about twice that figure.

The central bank warned last month in a quarterly report that a change 
in policy was needed to prevent a speculative bubble that could lead to 
a collapse in prices and put further strain on the country's fragile 
banking system.

Banks have also been told to cut back on lending for property 
development and other construction.

AP-ES-09-21-04 0945