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BIZCHINA / Biz Who

Owning home is better choice

(China Daily)
Updated: 2007-06-20 07:05

Long Yongtu, secretary-general of the Boao Forum for Asia, said at a
recent forum in Nanjing that it was not a "correct choice" that everyone
wants to purchase their own home. He suggested more Chinese rent homes as
in the US. About 30 percent of Americans own their homes while more than
60 percent rent. His remarks triggered a surge of media comments. The
following are excerpts.

Long Yongtu, the former commerce ministry official who negotiated
China'sWTOentry, gestures at a speech in Nanjing in this October 24, 2005
file photo. [newsphoto]

ShanghaiSecurities News:

Long is not the first official encouraging people to rent an apartment
instead of buying one. Neither is he the only one attributing the
preference of owning a home to a traditional perception of property and
family.

However, this preference is actually backed by economic calculations.
Closely connected to property prices, rents are also climbing as?real
estates become more expensive.

Related readings:
?Property investment grows 27.5% in 1st 5 months
Former top WTO negotiator proposes heavy taxes on developers
?Overseas enterprises must pay land use tax
?Land use tax raised to stop resource abuse
?Shanghailevies individual land VAT?

People owning their homes can enjoy life without being influenced by
rising property prices, but tenants have to worry about possible rent
hikes.

People also find it more economical to own a home rather than rent when
they estimate the costs of moving between rental apartments.

Most rental apartments in China are not necessarily well equipped for
instant move-in. The tenants may have to buy their own furniture or TV
sets. To make things worse, the items they need to buy could vary
dramatically in different rental apartments.

It consumes both time and effort to find apartments on their own if
tenants do not want to pay large sums to housing agents.

More importantly, the supply of apartments for rent is far less than the
demand. The reasonably priced housing built by the government is only
available for sale, not for rent. Such housing would be an ideal choice
for low-income earners if they were allowed to rent instead of buy.

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