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"Land cost: 195.82 yuan (US$24.8) per square meter, pre-construction cost: 37.58 yuan (US$4.76) per square meter, construction and installation cost: 832.09 yuan (US$105.4) per square meter…" This is part of a list of items associated with buying a home, which was produced by the local price bureau for a residential housing project named Jinjiang Guancheng in Yancheng, Jiangsu Province.

 

Basing on this and other information, the price bureau determined a benchmark sale price of 2,120 yuan (US$268.5) per square meter for the housing project, but allows that figure to float upwards by a maximum of 8 percent.

 

This move was taken just after Guangdong Province recently declined undertaking such an initiative.

 

In a reply to a proposal by province's People's Congress deputies which demanded publication of housing costs, Guangdong construction department said such a move "would be an infringement upon business confidentiality (of real estate firms) and affect the fair play environment." This response has aroused a great deal of debate.  

 

The list of housing costs produced by Yancheng, the first such official report in the nation, looks at 97 city housing projects which went on the market from 2004 onwards.  

 

Alongside the list of costs the Yancheng government also publicized a policy guideline on commercial housing prices. According to the document, pricing of common, commercial residential homes should be government-guided, which would mean price bureaus determine the benchmark sales price for these houses and allow the average sale price to float. For downtown areas the local government allows the price to rise by no more than 8 percent.

 

Jiangsu Province permits governments of its cities and counties to determine the benchmark price and floating band for common, commercial residential housing at different levels. The "cost list" and policy guidelines in Yancheng will ensure that the make-up of home costs is more transparent and constitute new measures for the local government to control prices.

 

In May 2005, Jiangsu Provincial Price Bureau led the country by issuing a circular on monitoring housing costs and regulating pricing. Apart from Yancheng, the cities of Wuxi, Nanjing and Yangzhou were also designated to pilot the program.  

 

According to the circular, these cities require to calculate the average social cost for commercial residential housing in different districts and publicize the figures biannually. For districts where housing prices are going up too fast or costs changing quickly, figures will be published every quarter. This aims to provide a mechanism to control house prices and windfall profit with the general public, consumers and enterprises all playing a part in it.

 

The practice of publicizing housing cost makeup for specific projects is like "wading across the stream by feeling the way", said an official with the property pricing office of the price bureau.

 

A noticeable change following the publication of the cost figures is that the public has fewer complaints about housing prices now, according to the official.

 

(China.org.cn by Yuan Fang, September 28, 2006)