China’s State Council, the Cabinet, has urged more support for affordable housing construction while continuing government tightenings to cool the market.
Officials attending an executive meeting of the State Council, chaired by Premier Wen Jiabao, agreed that the government will strive to ensure that construction of the nation’s planned 10 million affordable housing units this year will all commence before the end of November.
By the end of June, construction had started on more than 5 million or over half of the nation’s planned affordable housing units. The government expects that construction of nearly 4 million units will be completed within the year, according to a statement issued after the meeting.
China has witnessed “initial results” from its curbs on the property market and promotion of affordable housing construction, with speculative buying restrained and home prices have stabilized or even declined in some cities of excessive price growth, it said.
However, officials at the Cabinet meeting said great pressure of rising house prices still remained in some cities as the local governments there may have loosened housing price controls.
Also, affordable housings construction projects in different regions were not balanced with some regions progressing too slowly, meanwhile, there still lacked a good mechanism to channel social capital into affordable housing investment, according to the statement.
The State Council ordered local governments to strictly implement housing price controls. Differentiated housing-loan rates, property taxes in some cities, and house purchase limits should be continued to restrain speculative home purchases, according to the statement.
Meanwhile, the Cabinet said local governments must allocate more government funding and encourage banks to provide more loans to affordable housing projects to meet the government’s construction deadline.
Local governments should ensure adequate land supply for affordable housings construction and common commercial housing, as well as regulating the rental housing market to prevent rapid growth in rental prices.
China’s affordable housing program includes government-subsidized low-rent housing for the most financially difficult residents, public rental houses for those middle-income earners who can not purchase a house in cities, and upgrades of run-down areas.
In an effort to allow more middle and low income residents to have access to affordable housing, the government has over the years subsidized housing costs for low-income citizens, built more public rental houses, and fixed up run-down areas.
The central government last year allocated 80.2 billion yuan for affordable housing projects, with construction started on 5.9 million affordable housing units.