Failed government attempts to control housing prices have led to the decline of public confidence in the measures, says a commentary in China Youth Daily. An excerpt follows:

A recent online survey conducted by the social research center of China Youth Daily shows that the public has less confidence in measures adopted by the government to control high housing prices. Compared with the findings two years ago when 58.9 percent of those surveyed were confident about government macro-control on housing prices, the current percentage has dropped to 20.6 percent.

The decline in public confidence stems from the difference between the governments' targets and the public's expectations. The central government pursues financial stability, regional government aim to profit from land management while the public wants low housing prices.

The central government has been taking measures to control housing prices by increasing interest rates on loans, limiting the land supply and adding taxes. These may curb speculation but cannot decrease housing prices.

The central government requires regional governments to build low-price housing and low-rent housing for low-income families. But regional governments just want increasing profits from commercial housing development, such as through land transfer fees and taxes. The higher the housing prices, the more local governments profit and the better their political achievements may look. Therefore, regional governments have little interest in curbing housing prices or in building low-rent housing.

It is no surprise that public confidence in governments housing control is declining.

(China Daily January 25, 2007)