Government and Policy

Property costs in 35 cities to be examined

By Jia Xu (chinadaily.com.cn)
Updated: 2010-05-26 15:38

The cost structure of commercial buildings in China's 35 key cities will be examined in a survey to be conducted by the Ministry of Land and Resources (MLR), China's First Financial Daily reported on Wednesday.

The analysis will provide effective figures to policy makers who work on future property reform, and it will also show if developers have been reaping huge profits, a source told the reporter.

Many blame high land price as one major cause for soaring property prices, while figures from the MLR last June show that based on 600 real-estate projects investigated, cost on land purchase for developers only accounts for 23.2 percent of the property price on average.

Feng Lun, chairman of Beijing Vantone Real Estate said last year that developers' average return on assets is less than five percent.

The 35 cities include first-tier cities like Beijing, Shanghai, Shenzhen and Guangzhou, and second-tier cities include Shijiazhuang, Taiyuan, Lanzhou and Kunming.