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The Qingdao local government has vowed to exercise tougher macrocontrol over the real estate sector to offer more affordable houses to people.

 

The port city's move announced last weekend was a major policy reversal to bring down property prices after former Party chief Du Shicheng was sacked for allegedly raising them to achieve faster GDP growth.

 

"The housing policy should be human-oriented. Market mechanism alone cannot ensure a favorable house market for people in the low-income group. The government, too, has to play its role to stabilize and control the property prices," Qingdao mayor Xia Gen was quoted by China Business News as having said.

 

Local people and media welcomed Xia's remarks because it had long been felt that property prices in the city were abnormally high when compared to the low per capita income of its residents. And insiders had been alleging that Du had orchestrated the hike in prices to boost the city's real estate sector to achieve higher GDP growth.

 

Till Du was in office, property prices in this city in East China's Shandong Province kept rising from about 2,000 yuan (US$250) per square meter in 2000 to 6,288 yuan (US$786) by the end of 2006, whereas its per capita income stayed around 1,000 yuan.

 

"The Qingdao municipal government's latest move is a shift from its earlier housing policy," a noted scholar was quoted as having told China Business News.

 

The city will invest 500 million yuan (US$62.5 million) this year to build about 3,000 apartments and rent it to residents who cannot afford to buy even the cheapest houses, and grant about 80 million yuan (US$10 million) in subsidy to the poor to enable them to rent these houses. Also, it will build affordable houses on about 860,000 square meters for nearly 6,700 families.

 

About 18 residential areas in the city's old areas and suburbs, too, will be renovated to improve the living environment of residents.

 

To ensure that its plan is implemented fully, the municipal government has ordered all its related bureaus to map out their monthly schedule, which would be checked on a monthly basis.

 

Local real estate developer Li Na said the price rise had already slowed down since December.

 

"But given that Qingdao is an important city and many home buyers from other cities are flocking to it, it's unlikely that housing prices will see a major downslide," Li said.

 

(China Daily January 30, 2007)