A brief timeline of key housing reform is set out below:
1988
The PRC government amended the national constitution to permit the transfer of state owned
land use rights
1992
Public housing sales in the major cities commenced
1994
The PRC government further implemented reform and established an employer/employee funded housing fund
1995
The PRC government issued regulations regarding sales and pre-sales of real estate, establishing a regulatory framework for real estate sales
1998
The PRC government abolished the State-allocated housing policy
1999
The PRC government extended the maximum mortgage term to 30 years
The PRC government increased the maximum mortgage financing from 70% to 80%
The PRC government formalised procedures for the sale of real property in the secondary
market
2000
The PRC government issued regulations to standardise the quality of construction projects,
establishing a framework for administering construction quality
2001
The PRC government issued regulations relating to sales of commodity housing properties
2002
The PRC government promulgated the Regulations on the Grant of State-owned Land Use Rights through Competitive Bidding, Public Auction and Public Announcement . The PRC government eliminated the dual system for domestic and overseas home buyers in the PRC
2003
The PRC government promulgated rules for more stringent administration of real estate loans
with a view to reducing the credit and systemic risks associated with such loans. The State Council issued a notice relating to the sustained and healthy development of the real estate market
2004
The State Council issued a notice requiring that, with respect to real estate development projects (excluding ordinary housing), the proportion of capital funds should be increased from 20% to
35% .
Ministry of Construction amended Administrative Measure on the Presale of Commercial
Housing in Cities
China Banking Regulatory Commission issued the Guideline for Commercial Banks on Risks of
Real Estate Loans to further strengthen the risk controls of commercial banks on real estate
loans
2005
The PRC government instituted additional measures to discourage speculation in certain regional markets including, among others, increasing the minimum required down payment to 30% of the total purchase price, eliminating the preferential mortgage interest rate for residential housing, imposing a business tax of 5.55% on sales within two years of purchase, and
prohibiting re-sale of unfinished properties before they are completed
2006
China’s State Council instituted new measures on 24 May 2006 aimed at curtailing speculative
activity in the country’s residential market and ensuring that affordable housing is provided. Key among these provisions, which took effect on 1 June 2006, include mortgage lenders being
required to increase down payments from 20% to 30% of the property’s value for units larger
than 90 sq m; the existing business tax of 5.55% on the total proceeds from a sale of residential
property, currently levied on sales within the first two years of purchase, will be extended to
sales within five years of purchase; and units smaller than 90 sq m (including built-up area) must account for at least 70% of the total floor space in any new residential development.
Annual investment in real estate increased from RMB 498.4 billion in 2000 to RMB 1,315.8 billion in 2004, growing at a CAGR of 27.5% over the period. Since 2000, both GFA of developments under construction and GFA of new developments have grown significantly. As a result of increasing demand, the average selling prices of residential and commercial properties have increased at a CAGR of 5% and 7% respectively from 2000 to 2004.
The population, economic and real estate data of selected PRC cities are tabulated as follows:
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