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CRI Gov't Cracks Down on Speculative Purchases of Low-Cost Housing

From : CRI

The financial requirements for purchasing low-cost housing vary in different parts of the country because of development gaps. Taking Beijing for example, a three-person family with an annual income of less than 6,700 U.S. dollars and total assets not exceeding 53,000 dollars can apply to purchase low-cost housing.

But the public has long complained that wealthy people have been able to buy some of the low-cost apartments. It isn't unusual to see luxury cars parked in such housing communities, and some people even own several apartments.

To try to end this, the Ministry of Housing and Urban-Rural Development has issued a policy tightening management of low-cost housing.

The document says those who buy low-cost homes by providing false information will have the property taken away from them. It also reiterates a provision prohibiting homeowners from leasing or selling their low-cost apartments; otherwise, they will be deprived of the right to purchase government-subsidized housing in the following five years.

Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, hails the move.

"It's critical to ensure that government-subsidized housing be purchased by low- and medium-income households rather than those who make speculative pruchases to make a profit. The document should have come earlier."

Yi believes with the implementation of these policies, there will be limited room for speculation in the low-cost housing market.

But others argue that the implementation of the tightened measures may not be easy.

Industry insiders say many apartments in Beijing's low-cost housing communities such as Tiantongyuan and Huilongguan have all been rented out.

An agent surnamed Liu with Homelink Real Estate Agent says he doubts that the policy will work as planned.

"Real estate agents will be prohibited from being involving in the leasing of low-cost housing. But some individuals may still lease some apartments and then rent them out via message boards and the internet."

Some people have argued that the low-cost housing program should be abolished because of flaws in its implementation.

But Yi Xianrong with the Chinese Academy of Social Sciences has a different view.

"If housing prices return to a reasonable level, low-cost housing will disappear spontaneously, so there is no need to abolish it."

Yi stresses that this can be realized only after speculators are rooted out of the housing market.

For CRI, I'm Zhao Yang.