Source: CCTV.com

12-04-2008 09:53

Special Report:   House Market under New Policy

The construction of affordable housing began last year, in a bid to give poorer households a chance to buy their own property. But with prices in the real estate sector generally tracking downwards, many who had signed up for affordable housing are now pulling out.

With prices in the real estate sector generally tracking downwards, many who had signed up for affordable housing are now pulling out.

Some say prices for some ordinary houses are now even cheaper than those in this special category. While others fear that prices of affordable housing may also drop as part of an overall trend.

Of the fourteen thousand families who are approved to buy affordable houses in Beijing, one fifth gave up their right. Mr. Jia's friend is one of them. He is eligible to buy an apartment at Changying with a price of 5900 yuan per square meter. That is much cheaper compared to 9 thousand yuan, the usual price for homes in the area.

Mr. Jia said "My friend visited the houses but finally decided not to buy. Beijing's housing prices look like they are falling. He thinks the prices of these special houses may also fall after the houses in surrounding areas cut prices."

In February this year, the affordable houses at Xiziwan, in south China's Guangzhou, started selling at 65 hundred yuan per square meter. Soon after, another nearby property project announced a lower price of 48 hundred yuan per square meter. As a result, more than 100 families gave up their price-limited housing in favor of the cheaper option.

Qin Hong, Official of Beijing House and Construction Office said "House prices in many projects started falling. The advantage of affordable houses compared to other housing options is not as obvious now."

Affordable housing was launched by the governments in major cities in response to surging real estate prices. But since the second half of last year, the housing market in big cities such as Beijing, Shanghai, and Guangzhou have slowed down. Many property developers have had to market promotions or cut prices in order to sell houses. Experts say policies for affordable houses should be flexible as well.

Qin Hong said "The government should set the policies based on market conditions."

Experts say the price of affordable houses should be 10 or 30 percent lower than other projects in surrounding areas. If housing prices in Beijing continue to fall the price of these houses may also be lowered.

 

Editor:Xiong Qu