...at least that is what the mainstream pundits would say. To me it looks like just another example of malinvestment and why we should not get too carried away with the 'centrally planned miracle' that is China. From the China Youth Daily (sourced at Sinocism), here's a clip:

Although the welfare housing system has been ordered stopped, the covert housing welfare that exists for government employees has not stopped, and has become its own system. Some central government offices in Beijing not only have ample financial resources for housing welfare, but their prices are not even 20% of the market prices. And not only can local officials get a share of ownership in existing houses/property, but they even build new houses in the name of renovation and housing reform...

Housing is meant to be a one of the basic necessities of life, but at present it has become a very common problem. If the people want to realize their dream of having housing, they must count on the government to move. If government employees could feel the pain caused by these housing problems, that would give them the impetus to do something. But housing welfare for government employees is widespread, and it allows them to distance themselves from the housing market. Whether housing prices are high or low has little effect on their housing, so we must take useful steps to get them to do something. We can’t rely on their senses of responsibility or their consciences.

If the law has banned it, but civic organs are doing it openly, then that is public corruption! This kind of corruption not only destroys the government’s incentive to regulate the housing market, it gives government employees a vested interest in the continued rising of housing prices. Because government employees can get houses easily, the value and profit potential of their property increases as the amount of property they have goes up.

As Smith said in the Wealth of Nations (I.ii.2: pp 26-27), "...it is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages." The same cannot be said for politics. Under economic competition, people compete (earn economic profit) by best serving the consumer. By contrast, the worst tend rise to the top of the political ladder as there is a tendency for these people to both desire power and be effective at using it. Under political competition, politicians compete (earn political profit) by supplying wealth transfers to interest groups through legislation and regulation. This is what we are seeing in the Chinese housing industry and I have no doubt that there are countless examples littered throughout their economy.

Just another red flag...