BJ limits house prices on auctioned land

The first land auction under new rules set by the Beijing municipal government for self-use residential housing started on Wednesday. There are specific rules on the types of homes and prices built on this land. 

The land lot which has come under the hammer is located in Beijing's Chaoyang district. According to the new rules put forward by the municipality, more than 20 percent of the total building area will be turned into public rental houses, while the rest will be earmarked as commercial residential properties.

However, whatever price the land will be tagged, developers will only be able to sell the properties for 22 thousand yuan per square meter, which is roughly 20 percent lower than the area's average. In addition, the size of each apartment should be within 90 square meters.

"It's good news for residents. The lower housing price can make the property at least 10 percent cheaper compared to neighbouring areas. And it can save home buyers a lot of money." Yang Jinming, Deputy Director of China Land Science Society said.

Experts say such regulations of the house types and prices can help calm the property market.

"The current housing prices are still very high. In this situation, the measure of limiting house prices during the land bidding process is important for the control of the real estate market." Yang Jinming said.

Beijing officials say this policy will ensure housing for the lower-income segment of the population, support housing for the middle class, and free up the market for the higher end.