Affordable Housing Price Cut Predicted in China

The year of 2000 saw an overall price rise of affordable housing in China. However, in experts' opinion, room still remains for a price cut by affordable housing because of their construction cost.

An investigation by the State Statistical Bureau showed that as is seen in large and medium-sized Chinese cities at present per-square-meter affordable tags at about RMB3,000 yuan. A report from China Youth Daily attributes the overall price rise of affordable housing to causes as the following:

1. Land transfer practices contracted pricing instead of bidding or auction price, thus marginal competitive land price raises by estate dealers;

2. Increased decorative costs by estate dealers. But by the aforesaid investigation, big price raises were excluded by decorative material and labor force in 1999 contrasting previous year. Man-made reasons for price rising will be avoided;

3. Increased spending on communal infrastructure construction was seen. No estate dealers like to spend more on communal environment and service construction for a larger market share. But the situation will be changed since affordable housing requires a rational market.

In view of the aforesaid, rational room remains for a price cut in affordable housing this year.

But what should be noted is that the departments concerned are busy making policies to curb on upgraded demands or requirements as of higher standards and large room space for affordable housing. Affordable housing construction will be launched on the whole on decreased scale in China this year without doubt. But this does not exclude the fact things should be specifically made in different cities though an overall price cut is predicted in China. Take for example, Beijing offered by its affordable housing a floorspace of 1.5 million sq. meters in 1999. But this much took merely a short time for the city to have it all sold out.

By PD Online staff member Huang Ying

People's Daily Online --- http://english.peopledaily.com.cn/