Guangzhou sells budget homes

To stabilize housing prices, many Chinese cities have planned or are building budget homes. These are small apartments with restrictions on size and price. Guangzhou is the first city to sell these so-called budget homes. Chen Lijun finds out more for us.

This housing development claims to have the cheapest budget homes in Guangzhou. 780 apartments are on sale. And competition is fierce, with more than 13-hundred households looking to buy one.

Home Buyer, said, "I want to buy an apartment, since I don't have my own house. But I'm wondering if nearby housing prices are still falling. Prices at some housing developments have dropped from 4,800 yuan to 3,000 yuan per square meter."

Not only are prices set low, the apartments are also built small. Apartments range from 74 to 92 square meters.

Developers say the 4-thousand yuan price point leaves little profit for them, after deducting land and construction costs.

Guangzhou started selling these budget homes in February. Insiders say the city's falling property prices are related to the sale of these budget homes. Transactions for other kinds of property are shrinking, while budget home sales exceed 300 units every month. To compete with budget homes, many developers have offered discounts to lure buyers.

Han Shitong, Property Analyst, said, "There's no panic selling yet in Guangzhou's property market. But every district has projects that are selling houses at low prices or promoting excessively low prices."

Analysts say the government's macro-control measures and the release of budget homes and affordable housing have all contributed to the falling property prices.