Perhaps the single greatest challenge for governments of the 21st Century is going to be addressing the rapidly growing need for affordable housing.

Estimates of the problem vary but it is widely believed that at the beginning of 2008 there was a housing shortage of in excess of 500m homes globally .




Friday, 14 November 2008

China's investment into low-cost housing

CHINA will spend 900 billion yuan (US$131 billion) on building low-cost homes and renovating shanties in the next three years to solve housing problems for low-income families.

More than 2 million low-rent homes will be built, plus 4 million budget homes, while 2.2 million shanties will be renovated from 2009 to 2011, said Qi Ji, vice director of the Ministry of Housing and Urban-Rural Development. 

The plan is expected to solve housing problems for 7.47 million low-income families and create 2 million jobs, Qi said. 

About 10 million low-income families have housing problems in China. Two million of them have already had their living conditions somewhat improved under the country's housing plan.

The country will spend 100 billion yuan on low-cost housing this year. Eighteen billion yuan was spent on 320,000 low-rent units in the first three quarters.

The central government has allocated 6.8 billion yuan to subsidize low-rent home construction in central and western provinces, while local governments have collected 40 billion yuan for the project.

By the end of the year, the construction of 1.2 million budget homes will have begun and the country will start the renovation of shanties.

The State Council announced last Sunday that the country will take 10 major steps to stimulate domestic consumption and growth. In response to the central government's plan, some banks, such as the Bank of China, said they would boost credit to property developers and to low-rent property and affordable housing projects.

David Wardlaw from Speedwall Building Technologies (www.speedwall.com) commented that despite the downturn in real estate prices, governments are taking a long term view on the provision of housing especially to the poorer paid members of society.  He said that "investment at the base of the pyramid are becoming more and more attractive especially as financial instruments are increasingly allowing the poor to access the housing market.  Lower margin but high volume investment plays now have added investment security and consequently better prospects."

at 03:32