(China Daily-Xinhua)
Updated: 2008-02-22 10:52

Guangzhou's first batch of limited-price properties went on sale this week.

Built by Poly Real Estate Group Co Ltd, the 843 apartments in Baiyun district were priced at 6,500 yuan ($910) per square meter.

The company said it sold almost 700 of the units on Sunday, the first day of sales.

The homes are available only to families certified by the Guangzhou land and property administrative bureau.

Minister of Construction Wang Guangtao praised the scheme, saying this type of low-cost housing is essential for urban families living on average earnings in large- and medium-sized cities.

Li Sanzhong, an official with the Beijing municipal development and reform commission, said building work will begin on 4.5 million sq m of low-cost homes in the capital this year, adding to the 3.12 million sq m already under construction.

The Beijing municipal construction committee has asked for public feedback via its website on the property scheme, which makes low-cost homes available to urban families with annual incomes of less than 88,000 yuan.

While the scheme is likely to be rolled out in other cities, it is not without its critics.

Fu Weichong, chairman of real estate firm Hopefluent Group Holdings Ltd, said: "It is a bad idea to implement the price-limit housing policy or build subsidized apartments."

Speaking at a group discussion on economic affairs in Guangzhou on Sunday, Fu, who is also a member of the city committee of the Chinese People's Political Consultative Conference, said: "Price-limit housing should be abolished as it will bring about new inequalities and do harm to the harmony of society."

In an interview with Beijing's China Real Estate Business, economist Xu Dianqing, said: "Housing prices are complicated and decided by diverse factors such as location, environment and quality.

"By putting ceilings on prices the government is reducing developers' profits in a bid to help home buyers.

"However, in reality, this is very hard to achieve and could be detrimental to housing quality."