In an important step to enable thousands of Chinese to buy their own homes, the central bank will by the end of June promulgate rules for the country's banks to issue home mortgages of up to 20 years. The Commercial Bank Loan Management Measures will be the first national code setting out how Chinese can obtain long-term bank loans to buy homes, help reduce the country's 322.92 million square feet of empty residential space and spur privatisation of the urban housing stock. 'This will change the situation now, when people have to pay all at once to buy a home,' Xie Jiajin, director-general of the real estate department of the Ministry of Construction, said. 'It will become as it is abroad, where you pay over 10 or 15 years. This will enable more people to buy homes.' The loans, to cover 70 per cent of the purchase price, will be repayable over periods from five to 20 years and will be at commercial rates. Such loans could be the key to resolving one of the biggest contradictions in the economy - 322.92 million sq ft of empty housing and personal bank savings of 3.85 trillion yuan (about HK$3.59 trillion) - but only a small proportion of the population can afford to buy homes, because mortgages have been available only in certain cities and total just 10 billion yuan nationwide. For the big state banks, the small sums involved in home mortgages have not been an attractive proposition compared with the other kinds of business available and because they have not in the past been a national priority. But that is changing. The government wants to make the commercial housing market an engine of growth for the economy. This policy has many attractions - the industry is home-grown and does not rely on imports, it provides a stable, long-term alternative to bank savings and could divert some of the billions of yuan in 'hot money' away from stocks, bonds, futures and other markets. Most urban residents have bought all the domestic appliances they need and are looking for new things to spend their money on. Many policy-makers believe it is too early to make the car a mass consumer item because of shortages of roads, petrol, parking space and other support facilities. The problem has been that the cost of commercial housing is too high for the vast majority of people. Official figures show that a 600 sq ft flat in a Chinese city costs the equivalent of 15 to 20 years' salary, compared with about six years for a home in France, Canada, Britain or the United States.