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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 on Sunday.

"The development of the real estate has good prospects in a relatively 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 estimated continuous urbanization drive in China, more people may move to cities in the next decade and more, creating increasing demand for houses, Wang told a press conference at the 2008 Beijing International Media Center.

Relative 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 the real estate is the urbanization drive and reforms of the traditional house distribution system in the country, which pushed 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, driven up by about 5 percent as against 2000, according to the expert.

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

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

The country's real estate developers, which experienced huge profits in the past decade, sold out about 260 million square meters of houses in the first six months this year, and the sales value totaled one trillion yuan, representing an decrease of 7.2 percent and 3.0 percent, respectively, over the same period last year, statistics show.

Source: Xinhua