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Shanghai to lift supply of smaller homes to spur higher ownership
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SHANGHAI will increase the supply of medium to small-sized apartments under the city government’s latest policy to allow more people to own homes.
But questions are raised on the practicability of the new policy, as an analyst cited the difficulty in implementing a previous 70/90 policy, which required that a minimum 70 percent of homes in new residential developments should not be larger than 90 square meters but was later shelved across the country.
Shanghai’s latest policy requires that medium to small-sized apartments should account for at least 60 percent of new housing development in the city’s outlying areas, and 70 percent and above if it’s located in urban areas, the city government said in a notice.
For newly built homes near subway stations, at least 80 percent should be medium to small-sized houses, according to the notice. But it did not elaborate further or detail when the policy will come into effect.
The medium to small-sized apartments refer to flats no larger than 90 square meters in four to six-story buildings, flats of 95 square meters in buildings which are seven to 11 stories tall and those of 100 square meters in buildings more than 11 stories high.
However, the practicability of the new policy was questioned by Lu Qilin, director of research at Shanghai Homelink Real Estate Agency Co.
“The policy, while reflecting the local government wish to raise the affordability of houses because of the soaring home prices, will be rather difficult to implement just like the previous 70/90 policy which was later phased out around the country,” Lu said.
The 70/90 policy, launched in 2006 by the central government, was largely blamed for an insufficient supply of homes suitable for buyers who wished to upgrade.
The mean selling price of new homes in Shanghai jumped 31 percent from 2014 to 21,500 yuan (US$3,292) per square meter last year, the city’s statistics bureau said earlier this month.
The average cost of a new home inside the Inner Ring Road surged 34.4 percent year on year to 72,066 yuan per square meter.
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