Subsidies boost sales in Changsha

PUBLISHED : Wednesday, 15 April, 2009, 12:00am
UPDATED : Wednesday, 15 April, 2009, 12:00am

Subsidies provided by the Changsha government gave a big boost to sales of houses in the city last month.

Data from property consultant DTZ shows that sales of private homes in the city, which is the capital of Hunan, amounted to 1.4 million square metres in March, up 75 per cent from an average of 800,000 sq metres a month recorded over the first two months.

The performance lifted average monthly sales achieved in the first quarter to more than double the monthly average recorded last year, said Alan Chiang Sheung-lai, the head of residential property at DTZ's mainland division.

'The growth was mainly because of housing subsidy schemes by various governments.'

District and county governments in the province launched a range of subsidy schemes in the first quarter with between 10,000 yuan (HK$11,339) and 30,000 yuan in cash subsidies given to homebuyers depending on the size of the units purchased.

The measures were taken to help buyers seeking homes in the private housing sector because the central government was no longer offering subsidised housing.

A similar local subsidy scheme was first launched last August but on a smaller scale and now extended to the whole city and without previous limitations, agents said. The northeastern Yuhua district in Changsha is one of the latest joining the scheme.

The city government has set aside 100 million yuan to subsidise homebuyers with a limit of 80,000 yuan per subsidy and applications will be accepted from now to the end of May.

Because the market had suffered from low liquidity, housing prices in Changsha were less volatile than other cities and remained relatively stable after last year's correction, Mr Chiang said.

The average price of an apartment of 90 to 100 sq metres in Changsha is about 3,500 yuan per square metre, with prices for lower quality units starting at about 2,000 yuan per square metre.