With the home price rocketing in China, many citizens have given up the housing provident fund that was supposed to be an effective way for low and medium-level income earners to obtain mortgage.

 

The Beijing Times reported about 20 billion yuan (US$2.56billion) in housing funds are idle, according to a source from the Beijing Housing Fund Management Center.

 

The usage of the housing fund reached only 64.2 percent in 2006, a low percentage compared with 80 percent in the past.

 

The reason behind the housing fund's idle use is due to the low threshold of single-home loans for up to 400,000 yuan (US$51,282). The report said the figure could only account for little in the home price.

 

On the other hand, a survey conducted by focus.com, a leading domestic website on real estate, said 80 percent of those interviewed indicated their budgets for home purchase were likely to exceed 500,000 yuan (US$64,102).

 

Most respondents suggested the low threshold be increased and 66 percent of the surveyed said the threshold should rise to at least 600,000 yuan.

 

Beijing residents have set aside housing funds that have amounted to 113 billion yuan up until now. A total of 53 billion yuan has been extracted, with a balance of about 60 billion yuan still remaining in the fund.   

 

(CRIENGLISH.com March 17, 2007)