Widespread concern continues over Beijing's replacement of a
welfare housing distribution system with a market mechanism, as
houses on the market are believed to be hardly affordable for most
local people.
"The problem is especially severe when considering that more locals
will need to resettle in houses in the next few years because of
urban renovation. There is no foreseeable reason why house prices
will decrease," Lu Daoqia, director of the Urban Development
Committee of the Beijing Municipal People's Political Consultative
Conference, said in a recent exclusive interview.
According to an investigation of the conference, Beijing's leading
political advisory body, local urban renovation will force a total
of 340,000 households to resettle in the next five years, which
means at least 2 million square meters (21,527,734.63 square feet)
of low-cost housing will be needed each year to accommodate
demand.
It
is generally desirable for the public that per square meter (10.76
square feet) of housing be priced at 3,000 yuan (US$362) to 4,000
yuan (US$483), Lu said. However, the average price of housing per
square meter in Beijing is between 4,500 yuan (US$543) and 4,750
yuan (US$539), and could be as expensive as US$2,000.
The situation is not improved when looking at the general
population of the Chinese capital as a whole. Based on the average
annual per capita income of urban Beijing people for the year 2000,
10,350 yuan (US$1,176), the average three-member household income
is about one 11th of the total cost of an 80-square meter (861.11
square feet) apartment. This proportion in the world is usually one
fourth or one sixth.
This explains why more than 20,000 people are waiting to buy houses
in Huilongguan and Tiantongyuan, two economic housing projects in
Beijing, and includes many people who have been forced to resettle,
while there are plenty of commercial houses available on the
market, said Lu. But with the economic development of China, the
country's entry into the World Trade Organization, and Beijing's
winning bid for the 2008 Olympic Games, profit-driven real estate
developers see no reason to give up high-rate projects for economic
ones.
More and more luxury buildings are coming out on the market,
costing more than 6,000 yuan (US$734.6) per square meter, but only
one fifth of economic housing that was planned for last year is
actually under way, according to Lu.
"Some developers of economic housing deliberately slow down or
postpone construction to win time and bargaining power with the
municipal government for price increases," said Lu.
So
far, 58 percent of local employees have bought their own houses,
which used to be State-owned, and more are planning to do so in the
coming years.
Moreover, it is already well accepted in Beijing that housing is a
commodity and not a welfare gift.
For those Beijing residents who have purchased their own houses,
their living conditions have been greatly improved.
(China
Daily January 4, 2002)