Economy

Beijing to unlock affordable homes

By Wang Wei and Qin Zhongwei (China Daily)
Updated: 2011-01-20 17:34

Residents move to affordable apartments in Jindingjie, Shijingshan district. [Photo?/ China Daily]

Beijing plans to make an additional 200,000 homes available in 2011, renting them out to cash-strapped residents in a bid to mitigate the problem of high-cost housing.

The move marks a shift in policy from the previous practice of mainly selling affordable housing instead of leasing it out.

Qin Haixiang, a director of the Beijing Commission of Housing and Urban-Rural Development, said the new housing policy is mainly aimed at helping middle- and low-income people.

Qin made the announcement during a press conference on the sidelines of the city's annual legislative meeting.

He said the city government will both construct and buy the 200,000 additional homes.

According to statistics from the Beijing Office of Housing Security, the number is a huge increase on 2010, when only 10,000 such rental homes were available through the city government.

Qin said property developers will be able to reduce their investment in public rental housing because they will now only need to pay land rent, instead the one-time land premium.

"The policy is conducive to attracting more social capital into the indemnificatory housing market," he added.

Public rental housing is intended for the city's less well-off residents and typically offers homes that are between 15 and 20 percent cheaper than commercial housing.

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The latest move follows various attempts by the city to cool the rising cost of housing.

According to statistics from DTZ China, a global real estate adviser, the average housing price in Beijing is 20,746 yuan per square meter, an increase of 12 percent on the same period last year.

In contrast, the average salary in the capital is 4,000 yuan per month, according to the Beijing Bureau of Statistics.

It would take a person earning the average salary 50 years to save enough money to buy a 100-sq-m apartment, assuming he saved every penny he earned.

Guo Jinlong, the mayor of Beijing, vowed to improve people's housing situation in his annual work report. He said Beijing will build and buy 1 million affordable homes between 2011 and 2015, twice as many as in the previous five years. Deputies at this year's annual session put forward many suggestions for curbing the rising cost of housing.

Pan Shiyi, CEO of SOHO China, said housing prices will go down if the government raises the minimum down payment required to 50 percent or even 80 percent of the full purchase price. At the moment, people can buy a home by putting down 20 percent of its selling price.