Recently,General Office of the Ministry of Housing and Urban-Rural Development issued a policy stating that residential real estate transactions should be based within usable interior area, thus raising a heated public discussion. To learn more about the policy and its possible outcomes, The Southern Daily invited IESR Associate Professor Sisi Zhang and Wei Shi for and interview.

What concerns the protection of consumer rights, Sisi Zhang believes, this new regulation will effectively reduce any disputes over real estate transactions. Furthermore, it will diminish an improper yet still highly prevalent behavior among real estate developers who tend to “steal property”, and it will also regulate the whole real estate market. Professor also adds that, notwithstanding the official regulation of selling property as per overall unit area, the new policy will reduce any risk of significant price fluctuations due to the absence of fundamental changes in housing supply and demand.

Owing to the different types of housing, Wei Shi notes, the sharing coefficient (ratio of public use gross floor area over private use gross floor area) of the high-rise neighborhoods varies greatly, plus, it is usually left out in the real estate advertising campaigns. The policy, according to the professor, is expected to improve cost transparency of the residential real estate, regulate transactions, and reduce prevalent disputes over public areas.