SHENZHEN has pledged to provide 42,000 public housing apartments by the end of next year, local Chinese-language media reported yesterday.

Public housing refers to homes, funded either by the government or developers, that are sold at cheaper prices than commercial homes and for which the homeowners can have full ownership after a certain number of years and paying a certain sum.

Homes under the scheme will be sold at as low as half of the prevailing market rate, the reports said, quoting a recent government meeting. Their prices could range from 20,000 yuan (US$2,860) to no more than 50,000 yuan per square meter, depending on the location, the reports said.

A ceremony was held yesterday in Bao’an District to launch the construction of 13 public housing projects across the city that will provide 10,000 units of public housing.

The Shenzhen government announced in June last year that it will build 1.7 million new homes by 2035, with government housing accounting for up to 60 percent of the new supply.

According to the city’s housing authorities, by the end of 2017, Shenzhen’s permanent resident population had reached 12.53 million, and it is expected to reach 18 million by 2035. A 5.5 million increase in the number of the city’s permanent residents will likely create demand for 1.8 million new homes.

Shenzhen has always been a city of migrants. Its fast development depends largely on the influx of talents from all over the country.

However, surging property prices may discourage young talents from settling down in Shenzhen and prompt them to move to other cities where the cost of housing is not too prohibitive.

Under the new plan, 100,000 new homes will be built each year on average, doubling the current level.

Of the 1.7 million new units promised by the government, 60 percent or at least 1 million new homes will be affordable homes, including public rental homes, government-subsidized flats, and special apartments for high-caliber talents.

Currently, more than 80 percent of homes in big Chinese cities are privately owned, while public housing represents only 10 percent. Thus, Shenzhen’s move to ramp up the ratio of public housing to 60 percent for newly built homes represents a major policy U-turn.(Mu Zi)

Shenzhen, one of the most expensive cities in China, is poised to borrow a page from Singapore’s playbook for providing more subsidised housing.

In June last year, the city’s housing authorities released a document on deepening housing system reform and accelerating the construction of a multi-source, multi-channel housing supply and guarantee system to encourage both the renting and purchase of homes.

According to the city’s housing authorities, by the end of 2017, Shenzhen’s permanent resident population had reached 12.53 million, and it is expected to reach 18 million by 2035. A 5.5 million increase in the number of the city’s permanent residents will likely create demand for 1.8 million new homes.

To satisfy the growing demand for housing, the document suggests building 1.7 million new homes by 2035, of which housing for talent, affordable commercial housing and public rental housing should amount to no less than 1 million apartments. Since 2018, no less than 60 percent of the newly released residential land has been used to build such housing.

This indicates that the supply of commercial housing will represent only about 40 percent of the overall housing supply in Shenzhen between 2018 and 2035. The document also clarifies that a majority of the newly built commercial housing in the future will be ordinary commercial housing.

The scheme is the most complex and systematic housing policy the city has seen over the past 20 years and will have a major impact on the local property market, said Song Ding, director of the China Development Institute’s tourism and real estate research center. A limited supply of commercial housing will push up the price of luxury homes, while the affordable housing available will provide a solution for lower-income families, he said.

In 2018, government-funded homes in Shenzhen made up less than 20 percent of the housing supply, compared with 45 percent in Hong Kong and more than 80 percent in Singapore.

(Mu Zi)