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Individuals Dominate China's Housing Market
The latest statistics from the National Bureau of Statistics indicate that about 88 percent of housing sold last year in China went to individuals instead of institutions, the dominant buyer in the past.
China's total housing sales volume reached 295.4 billion yuan (US$35.6 billion) in 2000, and 84.9 percent was contributed by individual buyers ranging from blue-collar workers to millionaires.
Yu Zhengsheng, minister of Construction, claimed that individuals have become the dominant consumer in China's real estate market, taking the place of institutions only a few years ago.
Statistics indicated that 98.5 percent of apartments sold in Beijing's neighboring city of Tianjin were purchased by individuals last year, while the rates in the municipalities of Chongqing, Shanghai and Beijing were 96 percent, 95 percent and 87 percent, respectively.
Before 1999, civil servants and workers in large-sized State- owned enterprises usually rent apartments from their units at very low prices as a kind of welfare treatment.
The nationwide housing reform that was fully initiated in 1999 urged individuals to buy apartments from the real estate market with bank loans or government subsidies.
Chinese government at all levels have been putting their support behind building low-cost apartments with tax reductions and exemptions on at least 21 items, aiming to enable more low- and middle-income Chinese to own homes.
Banks immediately followed the trend to offer low-interest housing credit to individual home buyers under the guidance of the central government.
The mushrooming real estate corporations updated their marketing strategies in quick response to the changing real estate market.
Li Yong, section manager in charge of market planning with Beijing-based Tianhong Real Estate Group, said the drastic changes in China's housing system requires the real estate firms develop more market-oriented apartments to win more customers.
Situated in the northern part of Beijing, apartments in Huilongguan economical residential community, a masterpiece of Tianhong Group and the largest of its kind in China, has become a hot seller in the Chinese capital, which has had the highest prices for commercial apartments in the country in recent years.
"The low price of 2,600 yuan (US$313) per square meter, over 100 types of apartments choices, and nearly 47 percent of green cover rate were the outstanding attraction of our first phase project sales," said Li, who has been engaged in the business for more than a decade.
Although the detailed blueprint on the second phase of Huilongguan residential community has not been revealed to the public yet, over 15,000 Beijing families have swarmed to reserve their future apartments, a salesman at Huilongguan sales office said.
Such enthusiasm is not a rare case in other places around the country when citizens found it much easier to obtain housing loans from China's key commercial banks.
More than 330,000 households in Shanghai, China's first city to offer bank loans for individual housing consumption, have moved in new apartments over the past decade.
Since 1991, the city has issued some 25 billion yuan (US$3 billion) in loans to individual buyers. The municipality plans to grant another 9 billion yuan (over US$1 billion) in loans to boost the individual real estate market this year.
Guangzhou, another metropolis in south China, built over 1 million square meters of low-price houses to accommodate some 15, 200 low- and middle-income families in the past four years.
The "Market News" newspaper reported that Beijing residents expect to see a better housing market that will continue price reductions, simplify the purchasing formalities, have strict supervision on housing exhibitions and advertisements, convenient traffic services in residential communities as well as standard management of the residential areas.
The booming real estate market in the Chinese inland areas also attracted more overseas investors.
Hong Kong investors have so far invested about US$8.9 billion in over 400 real estate projects in the past nine years, sources with the Beijing-based "State Land and Resources News" newspaper revealed.
A business group headed by Canadian Prime Minister Jean Chretien last month signed four new agreements with Beijing in real estate and urban infrastructure construction.
Observers here believed that with the government's financial support and stringent regulation of the housing market, more low- and middle-income Chinese households will be able to purchase their own apartments.
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