Affordable homes 'could cool market'
Source: Xinhua |
March 10, 2011, Thursday
|
Print Edition
Print Edition
THE government's affordable housing program and whether it can help rein in rapidly rising house prices in China sparked debate during the ongoing legislative sessions in Beijing.
"The key factors lie in the details of the affordable housing program, such as the total amount, capital source and schedule," said Cao Honghui, a senior researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences.
"If the program is successfully implemented, it will help cool the red-hot property market."
China plans to build 10 million units of affordable housing this year, and it is part of a commitment to construct 36 million low-cost homes over the next five years.
Last year, land authorized for building affordable housing took up 82.3 percent of China's total housing land supply.
"An estimate of investment for 10 million units of affordable housing, say, 70 square meters per unit on average, would be 1.4 trillion yuan (US$212.93 billion), accounting for 5 percent of last year's fixed asset investment in the whole society," said Zhu Zhongyi, deputy chairman of the China Real Estate Association.
Yu Lian, president of the China City Construction Holding Group Company, suggested that the government transform affordable housing tasks into an industry, in contrast to the real estate industry.
"The affordable housing industry mainly caters to people's basic housing demands, while the real estate industry will assist people who want to improve their housing conditions or help meet people's investing demand," Yu said.
Though the affordable housing industry may have a comparatively low profit rate, "it can be profitable given its large scale, and thus banks would surely be willing to provide loans to the industry," said Yang Yuanqing, the president of Lenovo.
Ma Mingzhe, the president of China Pingan, suggested that insurance capital be used to support the building of affordable houses.
Jia Kang, head of the Research Institute for Fiscal Science of the Ministry of Finance, suggested the formulation of a program that would funnel some of the revenue from low-rent houses into the development of new affordable houses.
Researcher Cao said: "Although the capital supply for affordable houses may be promising, I would strongly advise authorities to lay down timetables for the location, construction and distribution soon."
Although the real effect of affordable housing on curbing home prices is unknown, experts agree that establishing an affordable housing system is a big step forward.
"The key factors lie in the details of the affordable housing program, such as the total amount, capital source and schedule," said Cao Honghui, a senior researcher with the Institute of Finance and Banking under the Chinese Academy of Social Sciences.
"If the program is successfully implemented, it will help cool the red-hot property market."
China plans to build 10 million units of affordable housing this year, and it is part of a commitment to construct 36 million low-cost homes over the next five years.
Last year, land authorized for building affordable housing took up 82.3 percent of China's total housing land supply.
"An estimate of investment for 10 million units of affordable housing, say, 70 square meters per unit on average, would be 1.4 trillion yuan (US$212.93 billion), accounting for 5 percent of last year's fixed asset investment in the whole society," said Zhu Zhongyi, deputy chairman of the China Real Estate Association.
Yu Lian, president of the China City Construction Holding Group Company, suggested that the government transform affordable housing tasks into an industry, in contrast to the real estate industry.
"The affordable housing industry mainly caters to people's basic housing demands, while the real estate industry will assist people who want to improve their housing conditions or help meet people's investing demand," Yu said.
Though the affordable housing industry may have a comparatively low profit rate, "it can be profitable given its large scale, and thus banks would surely be willing to provide loans to the industry," said Yang Yuanqing, the president of Lenovo.
Ma Mingzhe, the president of China Pingan, suggested that insurance capital be used to support the building of affordable houses.
Jia Kang, head of the Research Institute for Fiscal Science of the Ministry of Finance, suggested the formulation of a program that would funnel some of the revenue from low-rent houses into the development of new affordable houses.
Researcher Cao said: "Although the capital supply for affordable houses may be promising, I would strongly advise authorities to lay down timetables for the location, construction and distribution soon."
Although the real effect of affordable housing on curbing home prices is unknown, experts agree that establishing an affordable housing system is a big step forward.
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