A bright light shone on China's Wenzhou, Zhejiang Province Wednesday when it was announced that
the country's first individual cooperative housing project would
break ground within five months.
Zhao Zhiqiang, general secretary of the Wenzhou Marketing
Association, released the news at the Second China Individual
Cooperative Housing Seminar on November 15. Zhao told the seminar
that a piece of land had been secured from the government through a
trusted property company. If all went well, construction would
begin in five months, he said.
The significance of the Wenzhou housing cooperative's success is
that it sets an example for similar developments. At a cost of
104.58 million yuan (US$13.26 million), Zhengyuan Real Estate
Development Co., Ltd. from Rui'an City, Wenzhou bought the
development rights for a piece of land of about 2 hectares.
Previously the Zhengyuan company had signed a contract with
Wenzhou Marketing Association to develop the land for the latter,
which acted on behalf of 260 members of the Whenzhou Housing
Cooperative.
The balance of the interlocking relations is subtle. The 260
housing cooperative members entrusted Wenzhou Marketing Association
to act on their behalf and?the latter then signed a
development contract with a property company, which has the
legitimate right to buy and develop the land.
Zhao Zhiqiang admitted that "acquisition of land" was the major
bottleneck for China's individual housing cooperatives. "Wenzhou's
success came from a set of combined favorable factors: the legal
status of the marketing association as a social organization, the
expedient financing channels and a hung property market," said
Zhao.
As China's property market is mushrooming at seemingly
unstoppable pace, governments are constantly issuing measures to
tighten control over the sale of land, thus pushing up the price to
some extent.
The project will give the 260 housing cooperative members great
leverage to cut their housing costs. By having a company to build
their houses on a piece of land bought with their own money, the
members will finally be able to buy their homes for around 5300
yuan (US$762) per square meter. The average price of a tower block
home close to their site is around 11,000 yuan (US$1,394) per
square meter.
"As is shown by this housing project, land accounts for over 70
percent of the total cost while the actual construction and
development price per unit is less than half of the current market
cost for tower block apartments in this area," Zhao said.
Current membership of the Wenzhou Housing Cooperative is around
400. “If this project proves successful, we'll start the next one,"
Zhao said. He's the main mover and coordinator of the Wenzhou
Housing Cooperative.
Seven representatives from Beijing, Guangzhou, Shenyang and
Wuhan's housing cooperatives attended the Second China Individual
Housing Cooperative Seminar.
(Oriental Morning Post, translated by Wind Gu for
China.org.cn, November 18, 2006)