Ministry denies insufficient housing supply
(Xinhua)
Updated: 2006-05-15 10:56
China's Ministry of Construction on Sunday denied reports that housing supply
in some cities is insufficient, but admitted inconsistencies in the type of
housing available.
Statistics from 40 major cities showed the housing supply can satisfy normal
market demand, said a ministry spokesman.
However, some cities have an oversupply of expensive apartments and a
shortage of cheaper, affordable apartments.
At the end of April, the 40 cities had 1 million apartments with a total 120
million square meters on the market, of which just 12,000 apartments were
smaller than 60 square meters.
As house prices in China are relatively high compared with incomes, people
tended to buy small apartments, said the spokesman.
The Ministry of Construction has instructed local planning departments to
readjust the supply balance in favor of smaller apartments, and this is having
an effect, he said.
Since 2004, the government has taken measures to stop the property market
overheating, but prices have kept rising and investment is still pouring into
the sector, he said.
Analysts are divided as to how serious the problem is with some holding that
the vacancy rate is at a highly dangerous level of 26 percent. They have warned
of an impending economic "bubble" and called for stern measures to bring down
the vacancy rate.
Others, however, insist the vacancy rate is less than one percent, and that
rising house prices are a correct reflection of insufficient
supply.
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