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Comparing with the modest increase of CPI which only grew by 11.69% from 1997 to 2007, housing prices experienced an unbridled upswing: 52.57% at the national level and over 100% in most developed cities.
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Unlike most countries, such as the USA which adopted private land ownership, China has a dissimilar land system, i.e. collective ownership that land is state-owned and is delivered, owned and circulated under the government's central plan. Individual transaction is forbidden.
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As stipulated, land use right transfer for commercial, tourism, recreation and luxury housing purposes, where practicable, transfer through auction or bidding shall be adopted; where conditions do not permit and it is impossible to adopt the means of auction or bidding, the means of agreement between the two parties may be adopted, only given the transaction price is not lower than the lowest price determined in accordance with the regulations of the state.
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