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Regional govts' home-buy help sparks hot debate

By Xie Yu (China Daily)
Updated: 2008-10-14 07:27

The Nanjing government's decision to subsidize people who buy apartments has sparked heated public debate.

The Nanjing move follows similar decisions by Xi'an, Chengdu, and Xiamen to help lift the ailing property market.

According to the new policy, from Oct 1 to Sept 30 next year, people who buy apartments (including second-hand ones) below 90 sq m will receive a subsidy of 1 percent of the total purchase price. If the apartment size is above 90 sq m but below 144 sq m, the subsidy will be 0.5 percent of the purchase price.

That means if a person buys a 70 sq m apartment costing 600,000 yuan ($88,000), the subsidy will be 6,000 yuan, while for a 120 sq m apartment costing 1 million yuan, the subsidy will be 5,000 yuan.

Some people are strongly opposed to the policy.

"It is tantamount to using taxpayers' money to subsidize the rich, while common people are not able to afford apartments," a netizen named "Ever" said on the BBS of the Xinhua News Agency.

Bank clerk Yang Linsen said he did not care much about the subsidy and will take a wait-and-see attitude.

"I believe there is still room for a price reduction. A 5,000-yuan subsidy is nothing," he said.

Ding Xinjian, who bought an apartment in Nanjing, for about 900,000 yuan in April, said: "I think the new policy will be welcomed."

"I do not regret buying before the new policy took effect. The subsidy is not a large amount of money, and there are factors one has to take into account such as location, environment, and services."

Property developers have high expectations of the policy.

"We did not sell a single apartment during the National Day holiday, due to the nationwide market gloom," Duan Hao, a salesman of Guoxin Real Estate, said. The company owns three apartment projects in Nanjing.

"While we think the new policy will help improve our business, it will also lift the market," Duan said.

In the first week of this month, the trade volume of apartments in Beijing decreased by 30 percent, compared with the same period last year.

The situation in Nanjing is even worse. Only 38 apartments were contracted during that week, falling by 87 percent for the same period last year.

Chen Yan, a PhD researcher with Nanjing Academy of Social Sciences, said the new policy showed the government is trying to help the property market.

"It's reasonable. The government has not only taken into account the profit of developers, but also the market's influence on employment, taxation, and many aspects," Chen said.

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