China’s housing ministry has vowed to make sure everyone has a place to live, echoing the “common prosperity” campaign proposed by President Xi Jinping two weeks ago.
The Ministry of Housing and Urban-Rural Development aims to control rising urban home rents by restricting the annual increase at 5%, it said in a statement Tuesday. The policy is aimed at making rental prices more affordable for young people working in the big cities.
The ministry also said the future of urban development would switch from large-scale construction to improving the quality of existing urban buildings and promoting urban renewal.
China used to invest in massive shantytown redevelopment projects to boost property demand. With these projects, the local governments demolished old residential homes, and residents were encouraged to use their financial compensation to buy new homes. The projects, lasting for more than a decade, boosted property investment while burdening cities with heavy debt.
Currently, Beijing is discouraging local governments from following the old model of extensive urban development and construction, which had led to the demolition of old neighborhoods, said Huang Yan, vice-minister of housing and urban-rural development.
Beijing has been trying to cool down the country’s real estate market by cracking down on housing speculation and imposing curbs on indebted developers since 2017. Officials from different levels have reiterated this year that “housing is for living in, not for speculation”, showing Beijing’s current stance amid the slowdown of the country’s economic recovery.
Source: Dow Jones