AN increasing number of homebuyers are buying cheaper houses with limited property rights that are of about half the prices of commercial homes.
Homebuyers were driven to the cheaper property after home prices hiked again at the end of last year, the Shenzhen Economic Daily reported. A regulation curbing multiple home purchases was another reason for buyers to seek an alternative.
On top of this, an increasing fear of serious inflation was encouraging some people to invest in fixed assets, the Daily said.
Apartments with limited ownership rights in the Liuxianju residential estate in Xili, Nanshan District, which was developed by Xinwei Village, are selling for 8,500 to 9,000 yuan (US$1,286-1,360) per square meter while commercial estate property nearby is selling for about 18,000 yuan per square meter.
An estate developed by the military in Meilin, Futian District, is priced at 13,000 yuan per square meter. The average property price in the same area is more than 20,000 yuan per square meter.
Rents for the limited rights homes have already caught up with market rents.
I ve been looking at limited property rights homes recently, said Guan Sheng, a property speculator. I will buy limited property rights homes as long as the prices are low and the annual rate of return is 10 percent.
Most people buying homes with limited property rights are elderly or young newcomers to Shenzhen, said Xu Feng, director of the market research department of Midland Realty.
A property agent identified as Huang told the Daily that limited property rights homes built on village-owned land in Bao an and Longgang districts were selling for only 2,000 to 3,000 yuan per square meter.
Huang said the price of limited rights homes built by the military was the highest at more than 10,000 yuan per square meter for estates in Futian, Nanshan and Luohu districts because buyers were entitled to property ownership certificates issued by the military.
The biggest risk of buying homes with limited property rights is that no court will hear a dispute concerning illegal buildings and the purchase would be regarded as invalid, said Zhang Maorong, a lawyer with Guangdong Xinrong Law Firm. (Tina Chen)
