Affordable housing programs to cool down real estate
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China is pinning hopes on its affordable housing programs to cool its red-hot property market in the latest round of campaigns against rising asset bubbles, after the government moved to crack down on market speculation during the past year.
Experts held that to increase supplies of affordable housing is the key solution to guide the market toward healthy development and help stabilize prices.
During a talk show hosted by China National Radio on Dec. 26, Chinese Premier Wen Jiabao said the government will press forward housing price control and increase the supply of affordable houses for low-income earners.
His words came after the government had announced a plan to build 10 million more low-income housing units this year.
China is working on a more healthy system that provides housing that meets different demands, after an array of policies, including tighter credit for commercial housing, failed to produce satisfactory results in 2010.
In 70 major Chinese cities, home prices rose 0.3 percent month on month and 7.7 percent year on year in November last year, which was the third consecutive month prices rose.
China started the construction of some 5.9 million units of affordable homes in 2010, of which 3.7 million were completed, official figures showed.
Qin Hong, a researcher with the Ministry of Housing and Urban-rural Development, said the number of affordable homes is still "far from enough", especially as more low-rent homes are needed for China's "sandwich class" families who either are disqualified for low-cost housing or cannot afford the sky-high prices of commercial housing.
"By attaching more importance to affordable homes and low-rent housing, it seems that the government is leading the market in the right direction," said Zhang Hanya, head of the Investment Association of China.
The latest report from the State Information Center(SIC) also noted that the construction of the 3 million affordable homes and 2.8 million units renovated in urban shantytowns is shaping the property market in a more reasonable manner.
