China’s property market will continue to experience a steady and healthy development, said Chen Zhenggao, Minister of Housing and Urban-Rural Development in a press conference held on Tuesday during the annual two sessions of China’s government.

Chen cited several favorable factors including stable economic growth, a rapid pace of urbanization, and huge demand from urban dwellers. He also listed three main features of China’s real estate market: Rebounding sales, a large difference in needs between cities, and oversupply of real estate.

“Last year, the sales started to rise month by month. The sales area increased by 6.5 percent and sales revenue increased by 14 percent. We kept this momentum this January and February, so our conclusion is that sales are now rebounding,” Chen said.

“We see different situations between tier-one and tier-three or four cities, which gives us a big challenge in regulation and control.”

There was also 718 million square meters of housing inventory last year, an increase of 15.6 percent from the previous year, Chen added. This is primarily in third and fourth tier cities, he added.

On the surge in house price inflation in the first tier cities in China after the Spring Festival, including in Beijing, Shanghai, Shenzhen, Chen said the ministry will take measures to stabilize the housing price in first tier cities and some of the second tier cities.

“The first is to strengthen restrictions on house purchasing, tax and financial policies. Second, to increase land supply, and make it more transparent and expectable. Third, to increase the supply of small-and-middle-sized flats. Fourth, to crack down on illegal actions, and the last is to give appropriate guide to media reports of the real estate market,” Chen said, adding that the country is now considering “purchasing and renting” housing system reform plans to meet the housing needs of the public.

Chen said that China currently has 770 million urban residents, meaning 56.1 percent of the population live in cities. That number is expected to reach 60 percent in the next five years.

He added that China’s urbanization process provides great potential for real estate development. In certain small-middle cities, migrant workers have purchased 30 percent of the housing, so that they have great potential to drive housing purchase in the cities.

The ministry aims to renovate 18 million shantytown houmes from 2015 to 2017, according to the 13th Five-year Plan. For this year, China will further rebuild 6 million shanty homes and for those displaced, the ministry will try to increase the rate of monetary housing compensation to 50 percent from last year’s 29 percent.

Story by CCTV News