Ministry of Construction officials are seeking to increase
by 5 percent the number of individual low and medium-income
home buyers across the country who will be able to receive public
housing funds this year.
Officials said they hope to increase the number by encouraging
more employees to contribute to the nation's public housing
fund.
Wang Guangtao, the ministry chief, emphasized
that employees are required to pay 5 to 12 percent of their
pre-taxed salaries to the fund, with their employers contributing
the same amount.
However, many employees do not contribute to the fund, which is
the target group of the ministry's initiative.
In Shanghai, officials anticipate more than 160,000 people will
be added to the public housing fund system by the end of this year,
said an official with the local public housing fund management
center who declined to be identified.
At present, more than 3.2 million people in Shanghai are paying
into the fund on a regular basis.
The public housing fund was established in the 1990s following
the country's housing reform. The fund is designed to help medium
and low-income people to afford their own home. Money collected
through the fund can be used to buy homes, and mortgage loans from
the fund carry lower rates than commercial loans.
China raised PHF mortgage rates for individual house buyers last
year by 0.18 basis points, hoping to help stop housing prices from
rising further.
Effective on May 8, the annual interest rate for loans with a
maturity of five years or less has been raised to 4.14 percent from
3.96 percent, while mortgage loans with a maturity of more than
five years have been set at an annual interest rate of 4.59
percent, up from 4.41 percent, according to the Website of Ministry
of Construction, the supervisor of PHF.
Moreover, the ministry also said that the government is planning
to increase the supply of mid and low-end residential properties
with limits on selling prices.
The ministry will set limits on selling prices and sizes of the
units, and require developers to bid on land prices and selling
prices under government limits.
(Shanghai Daily February 26, 2007)