Leaders must root out speculation from realty sector and apply sweeping reforms to ensure its healthy development

The developments in China's real estate sector over the past decade indicate that it has been largely swayed by government policies. So to get an idea how the real estate market will perform and whether housing prices will rise or fall in 2013, we should understand the government's housing regulations and the extent to which it will tolerate price rise, instead of only analyzing supply-demand relations.

A look at the current housing market will help us find clues to arrive at a judgment about the possible real estate policies the government will adopt this year. Data from the National Bureau of Statistics indicate that housing prices in 53 of China's 70 large and medium-sized cities increased month-on-month in November, compared with 35 in October.