China's Urban Dwellers Take to Home Ownership

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Last updated at: (Beijing Time) Friday, August 09, 2002

China's Urban Dwellers Take to Home Ownership

Four out of five of China's urbanites own their own homes and 94 percent own some formof accommodation, the ongoing International Conference on Financing Social Housing heard on Thursday.

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Four out of five of China's urbanites own their own homes and 94 percent own some formof accommodation, the ongoing International Conference on Financing Social Housing heard on Thursday.

Since the mid 1990s, 80 percent of China's public housing had been sold to local residents, Vice-Minister of Construction Liu Zhifeng told the conference in Baotou city, north China's Inner Mongolia Autonomous Region.

Low-rent or free housing used to be one of the benefits provided by the state or state-owned enterprises before the country launched its opening-up and reform.

But the cost of the system made it increasingly hard for governments at all levels to build more and better houses. It became a headache for city residents to find suitable homes.

The central government began reforming the housing system back in the mid 1980s by selling luxury and spacious houses at market prices, providing middle-income families with cheaper homes, and accommodating low-income residents in low-rent apartments.

Governments at all levels have provided various preferential schemes to improve living conditions in the world's most populous country.

Developers of affordable homes can enjoy 21 tax reduction and exemption programs while keeping their profit margins below three percent.

Liu Zhifeng said a housing investment and purchase system featuring proportional contributions from the state, enterprises and individuals had been established gradually. Market forces played an increasingly significant role in coordinating housing resources.

Latest statistics with the People's Bank of China (PBC) showed that housing loans issued by China's commercial banks in 2001 were32.55 times of that in 1997.

Housing loans issued by domestic financial institutions totaled663 billion yuan (80 billion US dollars) by the end of June. Housing loans had become critical in the credit consumption of theChinese people.

Moreover, a recent survey showed that 48 percent of Chinese citizens wished to purchase or swap houses in the next couple of years. Sixty-seven percent of the people who had bought public homes wanted to improve their living conditions by purchasing new homes or exchanging houses.

As China's social housing system develops, a growing number of people, especially urban dwellers, will purchase their own houses with funds they accumulated themselves and the equivalent amount paid by their work units for housing buying as well as bank loans.

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