[photopress:beijingapartments.jpg,full,alignright]Beijing has a cunning plan to try and stop speculation at the bottom end of the housing market. First it plans before 2008 to build 110,000 affordable units with a total floor space of 8 million square meters.
The lucky purchasers cannot then sell them on for a profit which, no matter how minor, is still real estate speculation. So they cannot be sold on the open market. They have to be sold back to the government. This is a neat way to fight speculation.
That 110,000 units is but a start. Beijing Housing Construction Plan for 2006-2010 shows Beijing will provide 210,000 affordable housing units.
The plan calls for one bedroom apartment to be around 40 square meters, and two-bedroom apartments about 60 square meters. And they will never, if the plan is stuck to and the rules obeyed, appear on the open market.
Beijing’s housing prices have got out of control. According to a website affiliated to Beijing Construction Commission half of all new apartments in August sold for more than RMB9,000($1,125) per square meter.
According to Beijing Statistics Bureau Beijing’s per capita disposable income averaged RMB17,653 yuan (US$2,206.6) in 2005.