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Speculation sees soaring house prices
Updated: 2004-10-19 09:55

Providing a comfortable living environment for people in the city has become the main topic at the fifth Westlake Expo in Hangzhou. Many Chinese call this famous Zhejiang city a paradise on earth. But local government efforts to upgrade the local living environment has led to soaring house prices over the years and living in paradise is by no means cheap.

Houses, houses and more houses. For 6 million people living in Hangzhou, the city is an ideal place to live. Forbes magazine called it the best city in China in terms of commerce. And the local government is trying its best to improve the image of the city, CCTV.com reported Monday.

Zhang Lianghua, vice director of Hangzhou Construction Committee, said, "The City government has invested a lot of money in making the city more livable for its people. We are trying to upgrade the infrastructure and improve the environment."

But for common people, price is a problem. Ma Guoling is one of those who have benefited from government policies. He bought his 100 square meter apartment in 2002 for 400,000 yuan, and the price has now doubled.

Ma Guoliang, local resident, said, "Thanks to the policy, we could buy houses with our salary and bank mortgage. We are lucky."

But not everyone is so fortunate. The annual real estate price hike in Hangzhou has now reached 30 percent. One of the reasons for this trend is overheated investment. On the first day of the Westlake Real Estate Expo, transactions totaled 240 million yuan. Investors buy houses and wait for the price to rise. The result is empty apartments on the one hand and people with little means to find accommodation on the other.

House buyer said, "I live in the city and have to buy houses. But the price is too high for us." "I have been looking and trying to invest in buying places that cost 8,000 yuan per square meter."

Although the local government has tried to make the real estate market more open by raising second hand house taxes, it still refrains from dabbling in possible speculation. The average price of an apartment in the city has reached 600 US dollars per square meter. For many, an apartment has simply become a luxury.

Quality of life has become a top concern for people in cities like Hangzhou, but it remains a challenge for the local government to provide homes that are both comfortable and affordable.

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