• Fri
  • Sep 19, 2014
  • Updated: 10:53pm

Intervention sees price of new housing drop 11.3pc

PUBLISHED : Friday, 13 January, 2012, 12:00am
UPDATED : Friday, 13 January, 2012, 12:00am

Beijing Mayor Guo Jinlong says the average price of new housing in the capital fell 11.3 per cent last year thanks to heavy government intervention in the real estate market.

Guo outlined developments in the Beijing property sector yesterday while presenting the city's programme for 'scientific development' this year to municipal lawmakers and political advisers.

Members of Beijing's municipal people's congress and Chinese People's Political Consultative Conference have been holding their annual meetings this week. Beijing's control of housing prices was matched, the mayor said, by 'almost twice as much' investment in various government-subsidised 'policy housing' projects than in 2010.

The private sector's contribution to such housing projects grew 15 per cent he added, without detailing the size of the investments.

However, Guo did say that in order to build more subsidised housing units, Beijing had allocated 10 billion yuan (HK$12.3 billion) from the municipal coffers to a special fund.

By the end of last year, the municipal government had 230,000 new housing units under its control, 100,000 of which had been completed. Another 10,000 'public rental units' had been distributed, Guo said.

He pledged that Beijing would maintain a firm grip on the real estate market this year 'to facilitate the return of housing prices to a rational range'.

Deputy Mayor Chen Gang said a much larger share would be made up by public rental units this year - 'up to 60 per cent or more'.

In the private market, the mayor has urged the building of more small to medium-sized, mid-priced 'common housing units' rather than luxury units bought for investment.

Although Beijing does not have any plan to abolish the widely criticised hukou household registration system that limits domestic migration, Chen said the city must prepare more small housing units for future migrants.

Guo said the city's retail sales volume had risen 10.8 per cent last year at the same time as sales of cars and housing had fallen.

The number of motor vehicles sold fell 44.3 per cent last year, while housing sales, not including welfare housing, were down 14 per cent.

Guo said Beijing's economic output grew 8 per cent last year to 1.6 trillion yuan and it planned to maintain the same growth rate this year.

The government also targeted a strengthening of service industries and a 12 per cent growth in retail sales this year.

While admitting that the city suffered worse-than-expected inflation last year, with the consumer price index rising 5.6 per cent, Guo said city officials would try to keep inflation to around 4 per cent this year.

The city would also step up environmental protection efforts and the development of alternative energy sources, he promised.

44.3%

The amount by which car sales fell in Beijing last year. Home sales, not including welfare housing, fell 14 per cent, said Mayor Guo Jinlong

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