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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: SeaViewer who wrote (26147)2/9/2005 2:36:05 PM
From: RealMuLan  Read Replies (1) of 110194
 
The so-called economic housing gets their land relatively cheap from the gov., and has an income limit for the purchasers (somewhere =< 5,000 Yuan/month of income). And usually the price is capped around 5,000 - 6,000 Yuan a sq meter. However, in some cases, there is fraud, like everywhere else<g>. One person may end up buying a couple of apartments and sell them at a higher market price to make a profit. In Beijing, the fraud is rare.

And as you may guess, comparing with middle/high-end housing, economic housing has lower profit margin so developers do not want to take on them when there is land available for middle/high-end housing.

And the Central gov. has fully aware of the potential trouble in housing market in some Chinese big cities. So from 2005, it will put major effort on distribute more land to economic housing, while limit the development of high-end ones. How successful it is still remains to be seen. And that is why a lot of real estate developers are now have go to those "LanWei" project left from the last 10 some years, because no other land available.

And I read that Beijing from this year will try to lease the land on yearly contract (before it is all on 70-year contract) although I do not see any details.
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