China is expected to adopt
new housing policies by the end of the month to favour middle- and low-income
urban residents, officials and insiders said over the weekend.
One important adjustment is to divide current affordable apartments into two
types: those for sale and those for rent. This will create the backbone of the
nation's housing guarantee system in the future, said an official with the
Ministry of Construction, who denied to be identified.
Different from past policies, cities will be encouraged to construct and
lease out "low-cost houses" for minimum earners, officials said. Moreover, local
governments will provide certain allowances for these tenants on rental fees.
The remarks were the latest steps in regulating the real estate market.
On May 29, nine cabinet departments jointly issued an eight-article
announcement to curb the property price hikes in many cities, reports said.
"Cities at all levels must work out concrete plans on housing construction
before the end of September," it said.
"Because China is a populous nation, it is unrealistic to help each person
purchase an apartment of his/her own," said Fang Mingli, a real estate
entrepreneur in Beijing.
By building low-cost houses, the nation will handle the problem of the
large-number of urban people who cannot afford to buy a new house, he noted.
One controversial issue for real estate developers and insiders is that small
apartments no bigger than 90 square metres must now account for 70 per cent of
new homes being built.
"Low-priced apartments are welcomed by the mass of people who participate in
the distribution of social resources by purchasing new houses," said Meng
Xiaosu, who is chairman of China Real Estate Development (Group). But "the small
size is just the eye-catching part of the problem."
Nowadays, the proportion of investment into economically affordable housing
only accounts for 5 per cent of the total, which is far short of the increasing
demand for new houses from middle- and low-income families, Meng said.
"The ideal proportion of economically affordable apartments in China's real
estate market should surpass 30 per cent," he suggested.
