"Land cost: 195.82 yuan (US$24.8) per square meter,
pre-construction cost: 37.58 yuan (US$4.76) per square meter,
construction and installation cost: 832.09 yuan (US$105.4) per
square meter…" This is part of a list of items associated with
buying a home, which was produced by the local price bureau for a
residential housing project named Jinjiang Guancheng in Yancheng,
Jiangsu Province.
Basing on this and other information, the price bureau
determined a benchmark sale price of 2,120 yuan (US$268.5) per
square meter for the housing project, but allows that figure to
float upwards by a maximum of 8 percent.
This move was taken just after Guangdong Province recently declined
undertaking such an initiative.
In a reply to a proposal by province's People's Congress
deputies which demanded publication of housing costs, Guangdong
construction department said such a move "would be an infringement
upon business confidentiality (of real estate firms) and affect the
fair play environment." This response has aroused a great deal of
debate.
The list of housing costs produced by Yancheng, the first such
official report in the nation, looks at 97 city housing projects
which went on the market from 2004 onwards.
Alongside the list of costs the Yancheng government also
publicized a policy guideline on commercial housing prices.
According to the document, pricing of common, commercial
residential homes should be government-guided, which would mean
price bureaus determine the benchmark sales price for these houses
and allow the average sale price to float. For downtown areas the
local government allows the price to rise by no more than 8
percent.
Jiangsu Province permits governments of its cities and counties
to determine the benchmark price and floating band for common,
commercial residential housing at different levels. The "cost list"
and policy guidelines in Yancheng will ensure that the make-up of
home costs is more transparent and constitute new measures for the
local government to control prices.
In May 2005, Jiangsu Provincial Price Bureau led the country by
issuing a circular on monitoring housing costs and regulating
pricing. Apart from Yancheng, the cities of Wuxi, Nanjing and
Yangzhou were also designated to pilot the program.
According to the circular, these cities require to calculate the
average social cost for commercial residential housing in different
districts and publicize the figures biannually. For districts where
housing prices are going up too fast or costs changing quickly,
figures will be published every quarter. This aims to provide a
mechanism to control house prices and windfall profit with the
general public, consumers and enterprises all playing a part in
it.
The practice of publicizing housing cost makeup for specific
projects is like "wading across the stream by feeling the way",
said an official with the property pricing office of the price
bureau.
A noticeable change following the publication of the cost
figures is that the public has fewer complaints about housing
prices now, according to the official.
(China.org.cn by Yuan Fang, September 28, 2006)