Vice-Minister of Construction Liu Zhifeng has urged property developers to build more affordable housing to satisfy the needs of low to medium-income families.
"Their need for housing is still a concern because the trend for real estate developers has been to build bigger apartments," Liu pointed out in a written statement read out at the China Property Industry Analysis and Forecast Summit which was held on August 25 in Shanghai. "But many families cannot afford these," Liu added.
Liu described an apartment with a land area of more than 120 square meters as a "spacious house" and said that nearly half of the apartments for sale in 16 major Chinese cities would fall into this category.
In nine cities out of the 16 mentioned, apartments bigger than the benchmark 120 square meters account for 60 percent of the properties for sale. In one city, which Liu did not name, nearly half of the apartments and houses for sale are larger than 180 square meters.
Conversely, less than 10 percent of apartments for sale are below 80 square meters in the 16 cities.
A real estate insider said China, with its population of 1.3 billion, cannot provide spacious homes for every family due to land constraints.
"What's more, the cost of such accommodation is beyond people's purchasing power," Liu said.
Liu said the demand for smaller and more affordable housing is rising.
A survey in Shenyang, an industrial hub of northeast China, showed that nearly 16 percent of homebuyers want apartments smaller than 60 square meters, but only 2.6 percent of those for sale are below that size.
By contrast, only 2 percent of buyers can afford housing larger than 150 square meters, but nearly 35 percent of the houses in the city's real estate market are 150 square meters and bigger.
The survey also showed that most prospective homebuyers want to buy houses ranging from 60 to 100 square meters.
For urban Chinese, the average living space is 28 square meters.
Liu said that urban construction monitoring bodies at various levels should step up their efforts to determine homebuyers' needs and demands.
Last Friday, Minister of National Development and Reform Commission Ma Kai stressed that the government will support the building of more affordable housing and continue to curb rising real estate prices.
Ma said investment in property had grown 23.5 percent by July, after the government imposed much stricter regulations to the real estate sector.
Liu said the government would not be introducing new policies, in the remaining months of the year, to cool down the property market.
A senior policy researcher with the construction ministry said about 1 trillion yuan (US$124 billion), nearly one-10th of the value of China's total economic output in 2004, was invested in the property sector last year.
"Nearly 20-30 percent of these investments have become bad assets and the situation is getting serious," Wang Yulin, deputy director of the ministry's Policy Research Center, said.
(China Daily August 29, 2005)
