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Beijing will build more low-cost houses and strengthen its market supervision this year in a bid to provide more affordable housing and cool down the overheated property sector.

According to a government work report delivered by Beijing Mayor Wang Qishan on Friday, the city will begin building more than 3 million square meters of mid and low-priced commercial houses, two-thirds of which will be affordable housing. Another 300,000 square meters of cheap houses for rent will be built or purchased to accommodate the poor.

"Beijing will also introduce rental policies to upgrade current affordable house management regulations," Wang said. "Encouraging people to rent instead of buying is expected to alleviate housing difficulties for low-income families."

The mayor also said Beijing would try to strike a balance between overall land supply output and land development scale, ensuring a steady increase in real estate investment.

Last year real estate investment totaled 171.9 billion yuan ($21.7 billion), 2.9 percent lower year-on-year in terms of its proportion of overall social investment in fixed assets, but still accounting for more than half.

"Beijing will increase land for the construction of mid-sized and small as well as lower-priced residential houses, and actively promote the development of the second-hand housing market, to depress the excessive growth of house prices," Wang added.

(China Daily 01/27/2007 page3)