China Pilots Joint Ownership Housing Scheme in Beijing, Shanghai

Chinas housing author- ity has endorsed a pilot joint ownership housing plan in Beijing and Shanghai， as part of government efforts to stabilize the property market.

The plan aims to provide affordable housing to households that have difficulties in purchasing a home and push supply-side reform in the housing sector， said a notice issued by the Ministry of Housing and Urban-Rural Development.

The notice said that the plan should be in line with the view of central authorities that “houses are built to be lived in， not for speculation.”

According to a document published by Beijing local authorities， individual buyers will be able to buy homes with property rights to be shared by the government and buyers.

The government offers support in areas such as land prices and policy while holding a share of the property rights， and buyers must pay a share of the price according to their share of the property rights. The buyers will enjoy the same rights in household registration and childrens schooling as other home owners.

The policy has several restrictions， including that buyers and their families cannot already own homes， single peo- ple making purchases must be at least 30 years old， and a family can only apply for one home.

A total of 250，000 such homes will be provided in Beijing over the next five years. In Shanghai， 89，000 such homes had been provided by the end of last year.

The experiences of the two cities will be copied and expanded to other major cities， the notice said.

For a long time， soaring property prices have put city dwellers under pressure， making housing affordability a growing problem for policy makers， prompting measures to stabilize prices and curb speculation.

The Chinese authorities have been properly handling its real estate market which will not collapse as what happened in Japan two decades ago， said Ann Lee， CEO of new technology investment consortium Coterie.

“I am more optimistic about Chinas real estate market，” said Lee who is also author of a newly-published book Will Chinas Economy Collapse？

For one thing， the asset bubble in Japan was far worse than what China is experiencing and China can be relieved by comparing the asset prices， she said.

“It was really extreme there，” Lee said， while talking about the situation in Japan in late 1980s. The Imperial Palace， located in the center of Tokyo， for instance， was said to be worth all the real estate combined in California at that time.

“So the scale is completely different，” Lee said.

The Japanese governments adjustment of asset prices at that time though was also extreme， which led to the collapse of the economy， she added.

“Whereas so far we see in China， everything is very slow and modulated，”she said.

She said the regulators attitude also plays a key role in this regard. In Japan， regulators took action only when they sensed there was a huge asset bubble， whereas in Chinas scenario， theyve been proactively learning lessons from other countries， such as the financial crisis in the United States in 2008.

Chinas policymakers have been trying to keep the real estate from over-heating by requiring higher mortgage payments and limiting the number of homes that people can buy in big cities.

The property market in the country has also shown signs of cooling as prices have faltered in major cities amid tough government curbs.

Lee said Chinas regulators were pretty aggressive in trying to prevent the bubble from becoming too large， something not seen in Japan or even in the United States， where policymakers just left “the market to take care” until the bubble actually started bursting.

“There are lots of tools in the toolbox that the Chinese policymakers have in their disposal to address the issue and therefore I dont see them letting this become completely out of hand，” Lee added.

Chinas move to boost rental housing supply aims to provide a long-term solution for an overheated real estate market， analysts said.

China will launch pilot programs in 13 major cities， including Beijing， Shanghai and Guangzhou， to build rental housing on rural land， authorities said Monday. Many projects will be finished by the end of 2021， before expansion elsewhere.

Rural collective economic organizations can build and rent housing on rural land themselves or through joint ventures， according to the Ministry of Land and Resources （MLR） and the Ministry of Housing and Urban-Rural Development.

The move is an attempt to increase rental options and establish a housing system that is fair to both owners and tenants， analysts said.

For a long time， soaring property prices have put city dwellers under pressure， making housing affordability a growing problem for policy makers， prompting them to further tap the rental market to stabilize prices and curb speculation.

An unnamed MLR official said the move was in line with the central authorities comments made at the Central Economic Work Conference in December that “houses are built to be inhabited， not for speculation.”

“The mentality of Chinas real estate regulation has changed from a short-term to a long-term one，” said Kang Junliang with China Real Estate Association.

Long-term measures include a national property and land registration system， market-oriented renting measures and a classified land supply regulation mechanism， according to Kang.

China has recently taken a set of measures to stabilize the housing market and curb speculation.

On July 17， authorities in the southern city of Guangzhou decided to give tenants and homeowners equal rights to local education resources. In many Chinese cities， the right to attend schools is limited to the children of homeowners rather than tenants. Guangzhou is the first top-tier Chinese city to grant such rights to tenants.

On July 20， a notice was issued by the Ministry of Housing and Urban-Rural Development and other government departments saying that measures would be taken in cities with net population inflows， including increasing rental housing supply and setting up a governmentbacked home rental service platform.

On Aug 4， Beijing municipal government published a document to solicit public opinions， which said individual buyers would be able to buy a share of a house but still have the full “right of use.”

Chen Zhi， secretary general of Beijing real estate association， said the new homes were part of the citys long-term housing controls， making the system fairer by allowing more people to buy their own homes.

The policy has several restrictions on buyers. Buyers and their families cannot already own homes in their name. Single people making purchases must be at least 30 years old. And a family can only apply for one home.

“The new housing policy clearly targets households that have difficulties in purchasing a home，” said Liu Weimin， researcher with the State Council development research center.

Deng Liang， a Beijing-based lawyer， said the new homes could better satisfy housing demand while curbing speculation.

The country will establish a marketoriented and long-term mechanism that can curb real estate bubbles and prevent erratic fluctuations， according to the statement issued after the Central Economic Work Conference.

The government will use land， investment， lawmaking， fiscal and taxation and financial instruments in order to achieve its aim.

Chinas property market has shown signs of cooling as prices have faltered in major cities amid tough government curbs.