Homing in on affordable housing units

Low-income housing

Priority will be given to those on Beijing's affordable-housing and low-income housing waiting lists, as well as to single people who are more than 25 years old and lack a home in Beijing.

Nearly 80,000 applicants were eligible for the capital's first such project in Dougezhuang township in Chaoyang district, but only 2,000 units are available, so a lottery system was implemented to select buyers, under the supervision of government officers.

For Zhang Wei, deputy head of the Beijing municipal bureau of land resources, the newly added 50,000 units of government-subsidized homes will greatly change the supply-demand structure because approximately 80,000 new commercial residential apartments are offered each year in Beijing.

According to Chen, the government will further promote the construction of homes with shared ownership between buyers and government.

The government will offer property developers a much lower land cost in building such types of homes, thereby helping buyers to purchase them at a price 30 percent or even 50 percent lower than regular common residential homes.

The policy was carried out in accordance with the government's overall guidelines for solving the housing problem - low income parties are guaranteed places to live, the middle classes can afford to buy apartments under favorable policies and the rich are limited in what they can buy.

While previous regulations to restrain demand have been effective, the policy has now shifted to focus more on the supply side to ease the supply-demand contradiction.

All these measures, according to Zhang Dawei, director of Centaline Property's research center, is pointing to a trend that will let the market play a bigger role.

The market is in urgent need of a long-term mechanism that will allow it to adjust by itself, said Zhang.

Zhu Zhongyi, deputy head of the China Real Estate Industry Association, said at a recent forum that a long-term real estate policy mechanism should be established, mainly through economic and legal measures.

The most obvious signal, according to Zhu, is to promote the reform of real estate taxation. The relevant government departments are actively working on the project, but a timetable is not available yet. As a premise, a unified real estate registration system will be established this year.

According to Zhu Haibin, a China economist with J.P. Morgan and Chase Co Ltd, the new administration may bring in a new policy framework in the housing market by relying less on short-term demand-side measures and introducing long-term supply-side measures.