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Graft drives up housing prices

(China Daily)
Updated: 2009-03-11 07:48

We should make public that expenditures on bribes are a key component of the housing price and make efforts to cut them off to lower down the housing price, says an article on the website www.china.com.cn. Following is an excerpt:

The way housing prices are set, deemed secret by local governments and developers, has recently been a hot topic in the media, but most people seem to forget a key factor - expenditures on bribery.

As an investigation conducted by a high-ranking official in 2005 showed, 50 percent of the housing price goes to land and construction costs; 20 percent to taxes collected by governments; and 30 percent to house developers.

Developers are hesitant to tell the truth about their 30 percent because expenditures on bribery are included in it.

This investigation concluded that "corruption drives up the housing price".

The conclusion echoes the opinion held by some people that corruption constitutes a major part of the costs in building a home.

Many government officials have been punished for taking bribes from developers, and a chain of interests have already been formed between officials and developers.

(China Daily 03/11/2009 page9)