About half the welfare housing nationwide was sold last year, according to HSBC Securities Asia which cited figures from the Ministry of Construction. The sale of welfare housing was one of the main themes of the mainland's much-vaunted housing reform announced by Premier Zhu Rongji in March last year. HSBC property analyst Henry Kwong said housing reform last year focused on the sale of about 2.5 billion square metres of welfare housing to tenants. 'Virtually all of this should be sold by the middle of next year,' Mr Kwong said yesterday. Alongside the abolition of welfare housing, the housing reform also involves the construction of affordable housing for urban households, making mortgages widely available and eventually commercialising the entire housing market. The ultimate aim of the reforms is more effectively to use the housing sector as the growth engine for the economy and to help state enterprises off-load their burden on the provision of subsidised housing. The housing-reform programme was launched to resolve a litany of housing problems, including severe housing shortages, poor housing conditions, over-consumption of housing induced by low rents, shortages of construction funds and inefficiency in the system. In March, the Ministry of Construction, on the orders of Mr Zhu, raised the target for planned construction of affordable housing to 244 million sq m over three to four years from the previous target of 212 million sq m. State-owned enterprises and collectives will no longer be building or buying welfare housing for their employees. That means construction of commodity and affordable housing must grow by compound annual rates of 8 per cent and 25 per cent over the next five years. However, investors were cautious of a mismatch between reportedly high vacancies and affordability in the mainland's real-estate market, Mr Kwong said.