Price factors hit affordable homes

Late last year, Beijing authorities rolled out changes to the city's affordable housing scheme, requiring applicants to enter a lottery if they wanted to purchase a low-cost home. This was seen as a move to stabilize housing prices and increase local home supplies.

But despite a rush of applicants at that time, about 20 percent of those who came up lucky subsequently relinquished their rights to buy an affordable home in the city. Their choices seem to be justified.

First of all, prices on the homes in question were still too high for many low-income earners. Based on figures released at the end of 2013, prices at several of Beijing's affordable housing projects were upwards of 22,000 yuan ($3,552) per square meter. Obviously, such prices are far too high for most ordinary wage earners.

Second, these low-cost homes were priced 30 percent below surrounding residential properties at a time last year when prices were hovering near record peaks. Since the local market had already begun to show signs of cooling by the time of the lottery, many were willing to hold out for further price drops.