About 500 people have registered with an Internet property group in Shnaghai which claims it can build apartments at 40 percent below market price. The organizers of the consortium, made up of about 10 people, both locals and those from outside the city, are recruiting "partners" on the Internet to invest in the real estate project "Shanghai Home." Currently, the group holds gatherings twice a week to discuss their project.
To date, 500 people have registered with the site to show their willingness to participate.
"We created our plan because the current real estate price is unusually high," said Zhu Jian, one of the founders of the project, yesterday. "If we collect funds to build our own house, we can save some 40 percent of the price by skipping the profit of real estate developers," said the Jiangsu Province native. Zhu said the group will establish a company to participate in the public bidding for land. If successful, they will then invite construction companies to tender for the contract. They are planning to name the company Shanghai Home Real Estate Investment Company, according to Zhu.
Most of the members of the group are between 28 and 32 years old, and about half are from other provinces.
According to their plan, they will need about 60 million yuan (US$7.23 million) to build 300 apartments, each about 100 square meters. Its location will be around the Outer Ring Road. Each investor will have ownership of one unit but early investors will have more leeway to choose their houses.
"Possibly, each investor needs to pay 150,000 yuan in down payment. When the project is complete, they will then have the priority to buy an apartment," Zhu said. "The biggest challenge for us is to collect funds and win the land bidding," said Zhu, noting the new company could also cooperate with a real estate firm for investment. Yin kunhua, deputy director of the Shanghai Real Estate Economics Society, said: "The Chinese law allows individuals to collect funds to build houses if the method is legal." He said individuals are allowed to participate in the land bidding.
However, the process of fund collecting, public bidding and construction was very complicated. It requires at least 100 licenses from the government.
(Shanghai Daily January 26, 2005)
