THE sharp fall in housing prices will only make Guangdong's property market healthier, the province's construction chief said Sunday.

“Excessively high housing prices are not good for Guangdong's economic development, nor for resolving housing problems faced by the people' Lao Yingxun, director of Guangdong department of construction, told a press conference at the Guangdong Provincial People's Congress.

“The government does not like to see prices moving up and down like a roller coaster. This is unhealthy. We want to see smooth development.” He said that housing prices in Shenzhen and Guangzhou had been on the decline in the second half of last year, after skyrocketing for two years.

Figures show the fall was steep in the fourth quarter. Prices of private flats in Guangzhou fell 9.9 percent- to 10,433 yuan (US$1,440) per square meter - in November, compared to the month before. Prices in Shenzhen dived 13.15 percent to 15,069 yuan per square meter.

Out of the mainland's 70 most expensive cities to buy a property, Guangzhou had fallen to No. 59 in December from third place at the beginning of last year.

The drop in transaction volume was even more telling. The total area of Guangzhou private flats sold in November fell 41.1 percent year on year, while Shenzhen's fell 77.7 percent.

Prime land auctioned in December also fetched 35 to 63 percent less than neighboring sections in the same area auctioned in September, Guangzhou records show.

Lao attributed the fall in prices to macroeconomic controls taking effect.

(SD-Agencies)