High Price,Weak Market

Rising housing prices has been the topic Chinese people are most concerned with. In the capital Beijing,housing prices increased some 13 percent in February over the same period last year,despite a sluggish buying. Experts say the city''s improper housing product structure is the main cause of the "high price,weak market" phenomenon. They suggested that the government should fulfill its commitment to provide more affordable housing to meet the demand. CRI reporter Zheng Chengguang has more. Reporter: Statistics show housing prices in Beijing remained high,but at a slower pace in February. At the same time,transaction volume in the capital city fell sharply compared to the same period last year. Zhang Yin,an analyst with Beijing Hujie Investment and Consulting Company,says the phenomenon shows that high prices do not correlate with small transaction volume. One of the reasons is that there are too few low price real-estate products in the market. "Apartments available in the Beijing housing market are almost all medium or high-end ones. The housing products provided by the market do not coordinate with the demands of local residents,especially low-income groups." Zhang Yin introduces that the number of apartments sold in the last two years has decreased as floor space volume has increased. This shows that apartments with high square footage are popular in the current market. Zhang points out that real estate companies have raised housing prices because the cost of luxury housing is comparatively high,and by doing so they can make more profits. "It is natural that high-income families own more than two apartments in Beijing. But their investment ability is still limited. Since more high-end apartments are being provided in the market while the demand is comparatively low,this has caused the decreasing transaction volume." Zhang Yin suggests the government should fulfill its commitment to provide more affordable housing to meet the needs of local residents,particularly low-income families and white collar workers,who are also feeling the strain in buying an apartment. "More reasonably priced housing and economical housing should be built to satisfy the needs of the local residents. But I do not suggest the government directly intervene with the market housing price." Zhang gave his idea that the government could levy high tax on luxury housing developers,and use the money collected to fund those developers who are building affordable housings for ordinary residents.