Up until now, all commercial houses in China have been built by real estate companies. There are 260 individual investors in the project. Appalled by the cost of buying a house from real estate developers, they decided to build their homes themselves.

"The goal is to get a low-priced house", said Zhao Zhiqiang, one of the organizers of a privately-funded home building syndicate in Wenzhou, a booming coastal city in east China's Zhejiang Province. The houses in this project will be sold at cost price, about 5,300 yuan (662.5 U.S. dollars) per square meter, which is up to 5,000 yuan less than the going price for other houses in the city. "We have bought the land, and construction will start in five months' time", Zhao said.

Wenzhou is not the only city where people have formed private home-building syndicates, but it is the first city where project backers have been able to acquire land. In Beijing, Nanjing, Guangzhou and Shenyang, organizers of similar projects are trying to overcome a raft of obstacles.

"Private syndicate house building" is a new economic activity which seeks to reduce house prices by attacking the exorbitant profits made by property developers.

However, observers said private syndicate house building still had a long way to go to succeed, and the first thing it needed was a favorable legal environment.

Over the last twenty-five years, the property market has become an avenue to riches for developers. Eight of the 10 richest Chinese are from the real estate business.

The huge profits have attracted more and more capital. In the first ten months of the year, China saw real estate investment rise 24.1 percent year on year to 1.46 trillion yuan, according to the National Bureau of Statistics.

Some analysts have suggested house owners should pay an annual property tax according to the size of their homes and that the government should collect property transaction taxes to redistribute profits generated by rising home prices.

Source:佚名