State Pushes For Low-Cost Housing

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Last updated at: (Beijing Time) Sunday, February 10, 2002

State Pushes For Low-Cost Housing

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Continuous efforts to promote the housing construction market and satisfy the housing needs of middle- and low-income families are the top priority for the government's 2002 housing reform agenda, according to Vice-Minister of Construction Liu Zhifeng.

"We should change the trend of most real estate developers to construct luxurious villas and apartments," Liu told a national meeting on housing reform held yesterday in Shanghai.

"Those villas and apartments can bring much profit for developers but we have to realize that for most urban Chinese, ordinary apartments are still their first choice," Liu said.

The government has focused its present housing policy on providing more affordable apartments for middle- and low-income urban families.

"The whole housing sector should use high-tech practices to improve the quality and functions of the buildings," said Liu.

"And the design and construction styles should be both modern and practical as consumers' requirements have increased a lot."

To ensure the housing market has an adequate supply of those types of homes, the government should provide full accommodation subsidies, and commercial banks should provide market-tailored mortgage loans for clients, Liu said.

Xie Jiajin, director-general of the Housing and Real Estate Department under the ministry urged governments at all levels to build more affordable houses for families unable to purchase expensive homes.

"House prices in some cities are much too high," Xie said. "It has curbed the enthusiasm of house buyers."

Recent figures released by the National Bureau of Statistics indicate that the average house price nationwide last December was 2,304 yuan (US$278) per square metre, an increase of 11 per cent over December 2000.

"Fluctuations in house prices have been inevitable in recent years, but prices will come down gradually in the long term," said Xie, whose department is authorized to implement the State's housing reform.

He pledged to enhance enforcement of the State's housing policies, conduct comprehensive research into residential tax policies and fees and to use tax revenue to promote the construction and purchase of low-cost houses.

The ministry will continue its efforts to eliminate unfair fees that are included in home and construction costs and will encourage the construction of smaller houses instead of more expensive luxurious homes, Xie said.

China has adopted a market-orientated hierarchical type of housing policy. Affluent buyers can afford large apartments or villas; low- and middle-income families can afford more modest apartments; and impoverished urban residents can afford to rent houses with government subsidies.

Formerly, China regarded housing costs as a type of welfare provided for city residents and only nominal rental fees were charged.

In recent years, housing reform efforts have fuelled China's real-estate industry, which has made a considerable contribution to the national economy.

Official statistics indicate that China earmarked 485.7 billion yuan (US$58.5 billion) for real estate construction in the first 11 months of 2001, recording a year-on-year growth rate of 29.7 per cent.

Of this investment, 340 billion yuan (US$40.9 billion) has been channelled into home construction.

Source: China Daily

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