Luxury property development set to rein in in Shenzhen in 2006
(Xinhua)
Updated: 2005-12-29 15:20

Shenzhen, China's first special economic zone in southern Guangdong Province, is expected to have fewer luxury housing projects developed, in its latest bid to stabilizing once runaway housing prices in the city.

Huang Ting, deputy head of local land resources and real estate management authorities, said the unreasonable structure of housing supply contributed significantly to price hikes in the city's real estate sector.

As of early 2006, Huang acknowledged, the municipal government will specify the ratio between common condominium projects and luxury property projects in land-use right transfer contracts, so as to readjust housing supply structure in the city.

According to Huang, common condo projects will make up anywhere from 80 percent to 90 percent of Shenzhen's total property development projects in 2006.

The improved supply structure with fewer luxury housing projects will help lower housing prices in Shenzhen, Huang said.

Industry insiders said housing prices were mainly jacked up by price hikes for luxury housing in the city.

According to local land resources and real estate management authorities, common condos in Shenzhen in the first 11 months of this year were priced 10.82 percent higher than the year-earlier level. The price rise for luxury housing projects was 26.16 percent.

Huang said that fast economic growth, growling population, income rise and short supply of land were, among others, factors behind housing price hikes in the city.