Great potential in economy housing sector
11/4/2003 14:24
China should construct more economy housing to stabilize the real estate
market and curb excessive property prices, said Wang Guangdao, Minister of
Construction, eastday.com reported today.
More than 500 million square
meters of housing are needed in the domestic property market every year and
China currently builds some 300 million square meters of housing a year, so the
domestic real estate market has great development potential, Wang
said.
More than 80 percent of domestic home buyers are mid and low-income
earners, so they cannot afford to buy mid and high-end properties, Wang
said.
An excessive number of high-end properties have been constructed,
while supply is short of demand in the low-end housing market, he
said.
Fewer economy housing units are built every year, and the
properties are not bought by low-income earners, Wang said. Banks should be
cautious in extending real estate loans and strictly examine the qualifications
of property mortgage holders, he added.
Nearly 60 percent of the capital
of home buyers and property developers is currently extended by banks and
financial institutions, so the financial risks cannot be ignored, he
warned.
Property development investment reached more than 600 billion
yuan (US$72 billion) in 2001, an increase of 25 percent from a year before, and
soared by more than 30 percent last year, according to
statistics.
Individual housing loan balances amounted to nearly 700
billion yuan in domestic financial institutions last year, with loans to
property developers and individual home buyers accounting for around 10 percent
of total loans, the statistics indicated.
More than 100 million square
meters of housing went unsold last year, with half of them being unsold for more
than one year, valued at more than 250 billion yuan in total.
China
should open more of its second-hand housing market, an expert
suggested.
Wendy Zhang/ Shanghai Daily news
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