R&F boosts number of small flats

PUBLISHED : Wednesday, 28 June, 2006, 12:00am
UPDATED : Wednesday, 28 June, 2006, 12:00am

Guangzhou R&F Properties has boosted the number of smaller flats on offer in as many as three mainland housing projects in compliance with new central government rules designed to cool property speculation.

Under a new rule issued last month, at least 70 per cent of the flats in new projects must be no larger than 90 square metres, a restriction analysts expect will narrow developers' profit margins since smaller flats command lower prices.

'Our original plan was to build 50 per cent to 60 per cent small flats,' R&F chairman Li Sze-lim said.

He described the changes as 'minor', saying they would have 'no impact' on flat prices.

Nevertheless, some developers have asked the government to reconsider its decision.

'As many sites are planned for luxury residential developments, the developers suggested the restriction on flat sizes be relaxed to 110 square metres to 120 square metres,' Mr Li said. 'I believe the government will adjust the rule.'

Mr Li believes the number of property sales will fall in the short term and prices will stabilise at current levels.

However, R&F remains confident it will reach its sales target of 12 billion yuan for this year. It had already sold 80 per cent of the units it expected to sell for this year and last year, Mr Li said.