Investment in real estate development nationwide grew rapidly last year but there still seems to be an inadequate supply of small and medium-sized apartments domestically almost two years after the 70/90 policy was introduced, an industry report has concluded.
"Statistics compiled in 40 major Chinese cities between January and December 2007 have found that approved space for pre-sale and registered sold space for apartments below 90 square meters in size both accounted for about 25 percent of the total, which means a full digestion of such products over the past 12 months,'' said the report, conducted annually by the China Real Estate Association and released yesterday on the Website of Shanghai Real Estate Association.
In May 2006, the Ministry of Construction announced that the combined GFA (gross floor area) of all residential units below 90 square meters should account for more than 70 percent of the total GFA of a project. The policy, applied to residential developments that were given approval to commence work after June 1, 2006, was designed to raise the supply of small and medium-sized homes and discourage the building of luxury houses.
As housing prices soared over the past few years in the country, domestic demand for small and medium-sized apartments remained robust.
A survey conducted at the end of last year by China Index Academy, a national real estate research organization, has found that more than 40 percent of people in Shanghai, Beijing, Wuhan and Shenzhen preferred to buy apartments smaller than 90 square meters while another 35 percent said they would like to purchase residential units between 90 and 100 square meters.
(Shanghai Daily March 26, 2008)