China's Ministry of Construction has clarified two controversial rules issued by the State Council in May aimed at increasing the supply of smaller, affordable apartments, the Shanghai Securities News said Thursday.

 

In a circular issued to local construction authorities, the ministry said a small apartment that measures 90 square meters will also include floor space within its wall plus hallways, property manager's offices and other public areas shared among all property owners.

 

The State Council's May circular contains policies that are aimed at stabilizing soaring housing prices and increasing the supply of small homes no bigger than 90 square meters.

 

The market, however, could not agree on what the 90 square meters would include.

 

An earlier explanation by the ministry said the figure would not include public areas, meaning a buyer will have to pay for a much larger area.

 

The State Council circular also said small apartments must now account for no less than 70 percent of new homes being built.

 

This has caused another controversy: does the policy apply to each housing project or to the overall number of new houses in a city?

 

The answer from the Ministry of Construction is that as of June 1, small homes shall account for no less than 70 percent of all the buildings started in the next 12 months.

 

The report quoted industrial analysts as saying that the new rules from the ministry are both workable and flexible.

 

They will also bring to an end the two months of "wait-and-see" sentiment among housing developers, the report said.

 

(Xinhua News Agency July 13, 2006)