Government policies aimed at the housing market should be classified into two different categories: those aimed at affordable housing units and those aimed at ordinary homes.
Affordable housing units should have their prices set by the government and only the government should decide who is qualified to buy them. Local officials should also not offer such units to people from other areas.
Ordinary homes built for middle-class families should have their own set of specific curbs. For example, apartments covering between 60 and 100 square meters in floor space should only be made available to people with the means to pay off such homes within 10, 15 or 20 years.
Planners should also stop trying to restrict or control the prices of high-end properties. Prices for such homes should be set by the market. At the same time, the government ought to scrap the pilot property tax which is now being levied on luxury homes in Shanghai and Chongqing and tax up-scale homes in accordance with local governments' consumption tax rates.
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