The development of real estate in China has good prospects in the long run despite the sluggish demand, an expert from the National Development and Reform Commission said in Beijing on Sunday.

"The development of real estate has good prospects over the long term. After rational adjustment, it will show a more sound development trend," said Wang Yiming, vice president of the Macro Economy Research Institute of the NDRC.

Amid an expected continuous urbanization drive in China, more people may move to cities in the next decade and create increasing demand for houses, Wang said at the 2008 Beijing International Media Center.

Policies and measures will be worked out sooner or later to promote the stable and sound development of the sector, which is of great significance to the national economy, said Wang.

However, he ruled out any direct links between the Olympic Games and the housing market, saying the key factors affecting real estate are the urbanization drive and reforms of the traditional house distribution system, which are pushing more people to buy commercial apartments.

Statistics show that real estate investment accounted for nearly 20 percent of the total investment in fixed assets last year, a jump of nearly 5 percent from 2000, according to Wang.

He said real estate investment rose more than 30 percent between January and July this year, despite the falling housing demand since the second half of last year.

The decline in housing prices in some cities has strengthened a wait-and-see attitude among home buyers, which hurt housing sales.

Real estate firms, which made huge profits in the past decade, sold about 260 million square meters of homes in the first six months of this year, and sales value totaled 1 trillion yuan, or a drop of 7.2 percent and 3.0 percent, respectively, over the same period last year.

(Xinhua News Agency August 18, 2008)