Per capita urban living space has quadrupled since 1978, according to new government statistics, rising from just 6.5 square meters when China started its reform and opening drive to 26 square metres in 2005.

The Ministry of Construction released the figures yesterday, but the numbers also showed that gaps exist between different regions.

In China's eastern regions, average per capita urban living space stood at 28 square meters last year, but in middle and western regions it was 23.9 and 25.2 square meters respectively.

The most spacious place was east China's Zhejiang Province, where residents enjoy an average of 35 square meters each. At the same time the people of southwestern Guizhou Province have to make do with just 20 square meters.

Following Zhejiang, Shanghai and Beijing ranked second and third with per capita living space of 33 and 32 square meters respectively.

Due to its huge population and limited natural resources China should adopt a sustainable development strategy in the housing construction sector, advised Nie Meisheng, director of the Real Estate Commerce Association affiliated to the All-China Federation of Industry and Commerce.

"To satisfy the basic needs of urban and rural residents, we must ensure every household has adequate living space; but our national conditions will not allow us to follow the path taken by developed countries," said Nie.

The central government made June 1 the starting date for local governments to make 70 percent of their annual land supply available for the development of low-cost housing no larger than 90 square meters.

In Shanghai, the city's overheated property market is cooling down rapidly following the new policies.

Sales of new apartments and villas plummeted to 1.67 million square meters in June, down by 31 percent from May, according to a statement from the Senior Housing Research Centre of Centaline Shanghai, a leading property consulting firm.

Soufun.com, a local online housing agent, also reported a sales drop in the housing market last month. Weekly average sales in June dropped by 50 percent from May, its report said.

Zhang Tao, senior analyst with the Senior Housing Reseach said, buyers are waiting for prices to fall before they buy.

"Customers are expecting the prices to come down. They are anticipating the new policy on property development will lead to a big cut in house prices."

Since last month, the central government has increased the amount needed for payments on home loans and increased the capital gains tax. "It is still too early to say if property developers will cut prices following the implementation of the new policy," said Ye Ying, an analyst from the Chinasettle R&D Centre based in Shanghai, "Customers will stop buying and wait for the developers' next move."

(China Daily July 5, 2006)