The city government has set a range of benchmark prices for owners of limited-property-right apartments to reference for compensation when their apartments are expropriated by the government, the Southern Metropolis Daily reported yesterday.

According to a notice posted on the official website of the city's urban planning, land and resources commission March 3, homeowners of limited-property-right apartments that meet the requirements set by the government can get compensation when their apartments are expropriated in accordance with the benchmark prices, which are differentiated based on location.

Shenzhen became the only city in China without a rural system after it underwent two urbanization reforms in 1992 and 2004. Back then, nearly half of the buildings in Shenzhen were limited-property-right buildings owned by the native residents of the city, which were built without proper government approval.

It’s the first time that the city government has set benchmark prices for limited-property-right apartments. Most of these apartments are located in Fuyong, Xixiang, Guanlan, Minzhi, Buji, Dalang and Nan’ao. Nearly 90 percent of the housing supply in Shajing Subdistrict, Bao’an District, comes from limited-property-right apartments.

Wang Feng, director of the city’s real estate research center, said the benchmark prices only applied to former rural private buildings that had obtained limited property rights and to-be-handled historical leftover private buildings that emerged following the city’s urbanization reforms.

Wang said setting benchmark prices will be beneficial for homeowners with limited-property-right apartments to protect their legal rights when the government expropriates their apartments.

Song Liuqiang, general manager of a Shenzhen-based real estate consulting company, said that the government had been making concessions when it came to the amount of compensation offered to homeowners for expropriating their limited-property-right apartments, but the government wouldn’t encourage transactions involving these apartments.

Apartments with limited property rights are usually built on collective land in urban villages, but without property ownership certificates, meaning such apartments aren’t available for trading.

It could be risky to purchase limited-property-right apartments, because they might be difficult to resell since they don’t have official property rights. Also, as homebuyers only have the right to use these apartments without ownership, they wouldn’t be able to get compensation if these apartments were demolished by the government, according to the report.

Email: lijia@nbd.com.cn