Beijing gov't introduces joint property ownership policy, other Chinese cities may follow suit

Updated 2017-08-22 10:00:25 Global Times

Beijing authorities are mulling over new homes that will be owned jointly by the government and individuals to help first-time home buyers get onto the property ladder. In addition, the government has rolled out strict criteria that requires, for example, buyers not to own an existing home and single buyers to be at least 30 years old. It will be possible for buyers to pay 75 percent of the total apartment price and hold corresponding ownership with authorities, according to experts. The new policy could also encourage other Chinese cities to release further cooling measures and shared-ownership housing could be soon rolled out on a national level.

The Beijing municipal government has launched a first-of-a-kind joint property ownership program in an effort to help first-time buyers, tame surging home prices and further stabilize the real estate market.

The so-called jointly owned homes policy will allow the government to share ownership with purchasers, so that first-time buyers can own homes at a cheaper price, and give "right of use" to the latter, the Beijing Municipal Commission of Housing and Urban Rural Development (BMCHURD) said on August 3.

The commission announced on August 14 that such buyers can enjoy the local rights of household registration (hukou) settlements and school admissions for children.

But public concerns have immediately piled up over, for example, whose name can be inked on the housing ownership certificate, how will the ownership be shared and who is qualified to buy the homes.

Ownership proportion debates

According to the regulations released by the BMCHURD, buyers and their families must not already own a property under their names, or have owned one in the past. Single purchasers should be at least 30 years old and one family should only apply for one such home.

Householders living or working in a certain district will be given priority for the new apartments in that district over buyers from other districts, said the regulations that have now been released for public consultation purposes.

Shares of these kinds of apartments will be allocated by lottery.

"Buyers can get an apartment without paying in full, which will significantly lower the burden for first-time purchasers who have rigid demands for a home," Song Ding, a Shenzhen-based market analyst at the China Development Institute, told the Global Times on Thursday.

The proportion of the ownership, which has drawn the most public attention, will be decided on the basis of housing prices in the neighborhood as well as the buyer's pressure of getting a home, experts said. Authorities have not clarified that clause yet.

For example, a 50 percent ownership for each side is possible. In such case, buyers would need to pay just half of the asking price to get a home and could buy back the rest of the shares in the future, Yan Yuejin, a research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Thursday.

Yan forecast that, given the current market situation, it is reasonable for buyers to pay 75 percent of the total home price and get 75 percent of the ownership. The remaining 25 percent of the ownership will then be held by the government.

The average sales price of a new apartment in Beijing was 48,463 yuan (7,263) per square meter in July, up 12 percent from the previous month, according to recent data released by E-house China R&D Institute.

Strengthened support

"The municipal government has absolute control over housing agents' role in the shared-ownership home plan and we are not allowed to help sell or rent these kinds of apartments," said an agent surnamed Ju, who works at a branch of the real estate agency Lianjia in Beijing's Chaoyang district.

Ju told the Global Times on Friday that the newly announced jointly owned home program is like "an improved version" of the old, self-occupied home, which was released in 2013 as a part of the country's low-income housing program.

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