Despite macro-control policies by the central government, those business persons engaged in China's housing industry still belong to the richest group in the country.

Ninety-four of the 500 richest people in China are in the real estate business, according to a latest list released by the Guangdong-based "New Fortune" magazine.

Those real estate tycoons on the rich list possess wealth worth 136.39 billion (US$ 16.4 billion), accounting for 23 percent of the total wealth owned by all 500 richest. The top 17 contributed 18.5 billion yuan to the total wealth on the list, the magazine said.

Meanwhile, China's housing prices have been soaring since 2003. The country's average housing price rose by 14.4 percent in 2004. In the first quarter of 2005, housing prices rose by 12.5 percent year on year.

In east China's Shanghai municipality, which has one of the most expensive housing markets in China, the average price of housing in urban and suburban regions has exceeded 10,000 yuan (US$1,200) per square meter.

It has become more difficult for ordinary urban people to buy decent residences. The proportion of affordable houses has reduced from 6.1 percent in 2003 to 4.6 percent in 2004, said Zheng Jingping, spokesman for the National Bureau of Statistics.

Building and selling commodity houses has become the most profitable business in the country after China started its reform on traditional housing welfare system in early 1990s. Before the reform, most urban people live in residential apartments from their working units with low rents.

International practices suggest that the cost of construction accounts for about 72 percent of the total housing price, while land costs, taxes and profits make up the remaining 28 percent.

But in China nowadays, spending on housing construction accounts for only 42 percent, while land leasing fees, profits and other taxes and fees, take up 58 percent.

Some real estate business men have said land leasing fees are growing too fast, which contributes to the price hike of housing prices, but an official with the State Development and Reform Commission said the price rise of land and raw materials only contributed to 1.38 and 1 percentage point growth respectively of housing price level last year.

China's real estate developers are gaining amazing profits. Wang Zhe, the 36-year-old board chairman of a Beijing-based real estate group, quit his job in the local city government of Sanya in south China's Hainan Province and started a real estate business from scratch in 1994, according to Beijing News last Friday.

After a decade of work in Beijing's real estate, Wang is now selling some of the most luxurious villas in China, with the lowest prices of 20 million yuan each, the Beijing News said.

After a range of measures designed to slow down China's soaring housing prices, seven government departments took further action last Wednesday, issuing proposals for stabilizing housing prices, including restricting developers' profits to three percent.

(Xinhua News Agency May 15, 2005)