National guidelines on economically affordable housing have been along with new State measures on housing for low-income families.

According to the the guidelines jointly released by the Ministry of Construction, the National Development and Reform Commission, and five other ministries, economically affordable houses ought to be around 60 sq m per unit.

It said eligible purchasers will ‘have limited property rights’, and that the apartments can only be directly sold after five years.

The document limited fundraising for co-operative housing units to independent mining corporations on the outskirts of cities and enterprises with a significant number of employees with housing problems.

Eligible applicants of the Measure on Low-rent Housing Security, meanwhile, are no longer limited to city households with the lowest income, but will also include all lower-income urban families with housing issues.

Government subsidies, the usual means of securing housing for these social groups, are to be gathered from rental fees on low-rent housing, credit risk reserves, housing provident funds, social donations and security funds. Local governments must also spend 10% of the local land-use fees on developing low-rent housing.

The construction area of these apartments, limited to 50 sq m per unit, should be granted preferential status on a stand-alone basis in land supply schemes and annual land-use applications.

According to the People’s Daily reported despite a record RMB7.04 billion ($9.52 million) of central government investment in low-income housing so far this year, RMB50 billion is needed every year for the next five years to continue to broaden coverage.
Source: China Daily

China’s Ministry of Finance has issued detailed rules about the development of a low-rent housing system in the country.

The State Council had earlier issued a circular in August saying that the system is to come into effect on Jan 1, 2008.

The rules have made it clear that the funds earmarked for the system will come from all investment gains from the national Housing Provident Fund less provisions and expenses, and at least 10% of all land use right transfer proceeds, among other revenue sources.

The State Council in August released a document laying out the guidelines to set up an affordable and low-rent housing system accessible to low-income families in urban areas due to the recent hike in property prices.

The usage of the funds will be tightly monitored at local government levels, and any violations of the rules will be subject to severe punishment, the Ministry of Finance added.

The Economist is one of the magazines journalists depend on. It is superbly edited and rarely gets things wrong.

Now it has said that home ownership among China’s urban households is 80%.

Sam Crispin, writing in CBiz.cn expresses extreme surprise. As you would. In world terms that is a staggeringly high figure.

According to the London Times only 70% of UK households own their own home.

Some digging into The Economist report suggests that it comes from an August 2002 (note the date) statement from the Ministry of Construction, as reported by Xinhua, which actually states that 4 out of 5 urbanites (not households) own their own home and 94% own some kind of accommodation.

The Joint Center for Housing Studies at Harvard University, dated July 2005, points to a possible cause. This paper shows the difference between fully transferable property rights that come with commodity housing (shangpin fang) and usage rights (shiyong quan). For the latter the rights are inheritable but there are restrictions on other forms of transfer. Ownership of a sort but not probably in the way that The Economist presented it.

So with that 80% quoted in The Economist, even though it was a very dated figure, you could make a guess half is usage rights and half is commodity housing with fully transferable title.

Sam Crispin writes, correctly:

The true significance of this is that we lack quality statistics with which to accurately measure home ownership, price increases etc and that policies are being drawn up without a clear picture of the real situation.

Read the full article by clicking on Source below.
Source: CBiz.CN

Li Xiaochao, spokesman for the National Bureau of Statistics, has said the current housing supply should be better structured as demand from urban residents is expected to increase even faster in coming years.

He said, ‘More efforts should be made to improve housing supply at medium and low prices, which are most popular with urban residents.’

Most property development is at the high end of the market. Analysts and industry experts said the excessive increase in property investment poses long-term economic and financial risks.

Shuai Hu, a property market analyst at Haitong Securities, said: ‘A stricter macro-control policy on property development would take pressure off inflation and help smooth out asset price rises.’

The National Bureau of Statistics says the aggregate fixed-assets investment rose 25.7% in the first nine months from the previous year.

In the first three quarters, aggregate investment in the country’s property development reached RMB1.6 trillion, up 30.3% up from the previous year.

Kenny Ho, research head of Jones Lang LaSalle, a leading real estate agency, said the much stricter macro-control policy on property by the government could accelerate the decline in bank loans for property projects in the fourth quarter, following a downward trend in the third quarter.

The government’s renewed efforts in the real estate industry had a large impact on property stocks. Property shares are beginning to fall although not, as yet, in a major way.
Source: China Daily

There is going to be a tightening up on the checks carried out on people buying low-cost, government-subsidized housing. An official with the Beijing Construction Commission said that stricter criteria will be introduced.

Cheng Jianhua, vice-director of the commission’s housing management department, said, ‘Family assets, including existing housing, cars, stocks, savings and jewelry will be key criteria to assess applicants’ ability to buy low-cost homes.’

The idea of the new restrictions is that government housing will only be allocated to those who truly deserve it and a comprehensive assessment process will make sure that happens.

Beijing started the construction of government-subsidized housing early in 1998. And more than 50 such projects with a combined floor space of over 2,000 million square meters have so far been completed in the capital, providing homes to more than 200,000 families.

According to Beijing’s housing construction plan for 2006-10, the city will build 110,000 low-cost homes with a combined floor space of 8 million square meters before the end of next year.
Source: China Daily