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More land supply helps curb housing prices

08-02-2010 10:27 BJT

GUANGZHOU - More than 56,108.2 hectares of land were on offer for residential use across the country in the first six months of the year - up 135 percent year-on-year - as authorities stepped up efforts to curb an excessive increase in housing prices while developing a trend in government-subsidized housing.

The largest increases were reported in the provinces of Guizhou, Jiangxi and Heilongjiang, the Ningxia Hui autonomous region and Beijing, the Ministry of Land and Resources reported in a statement on Saturday.

Beijing, for example, supplied 1,450 hectares - or 400 percent more than that for the same period last year.

Government-subsidized housing, temporary housing, as well as small and medium-sized commercial apartments, the purchase of which the authorities have been encouraging in particular, took up 42,000 hectares of land offered in the first half of 2010, or 75 percent.

Earlier this year, the Ministry of Land and Resources said that such land should not come below 70 percent of the nation's total this year.

Government-subsidized housing alone took up 9,472 hectares of land - or 133 percent more year-on-year - in the first half of 2010, with biggest growth recorded in the provinces of Hainan, Qinghai, Guizhou and Heilongjiang, and the Ningxia Hui autonomous region. The massive growth in land supply and a more rational land supply structure played an active role in stabilizing the market expectations, according to the statement.

However, with the exception of Beijing, Tianjin and Jiangsu, not a single province, municipality or autonomous region on the mainland fulfilled even half its land supply plan in the first six months of this year.

With the exception of Shanghai, however, other municipalities recorded an increase in land supply during this time period.

Shanghai offered 320.7 hectares of land in the six months, representing a 19 percent decrease year-on-year - and far below its yearly plan of 1,100 hectares.

According to the plan, moreover, 185,399.2 hectares land will be offered across the country this year, an 80 percent increase over last year - or 135 percent more than the average in the previous five years.

In addressing imbalances and low ratios in the fulfillment of the land supply plan in the first half of the year, the statement offered a decidedly wait-and-see approach to the real estate, property and land markets, while instilling a lesser degree of momentum in the competition for land.

Since failures in opening bids for land auctions and the auctions themselves have become constant, overall land prices have plummeted.

Beyond that, the fact that some regional officials have been busy working out government-subsidized housing projects and preparing needed capital has also led to failure in instituting land supply plans.

Consequently, the demand for the land has decreased, said Zou Xiaoyun, a deputy chief engineer of the China Land Surveying and Planning Institute told Beijing News.

"The property market was relatively active in the first three months", Zou said, "but the market is not strong now - and nor is the land supply."

Some local governments may not have been very clear about the demand for government-subsidized housing.

Indeed, added Zou, some may have even lacked the capital for developing the land for commercial use - something else which may also have affected land supply.

The Ministry of Land and Resources, for instance, requires local authorities to step up their efforts in analyzing land demand and fulfill the land supply plans as mandated while preparing lands for future development.

The Chinese authorities have implemented a series of measures to rein in soaring home prices and curb property market speculation so far this year, including tighter scrutiny over applications for financing, the limiting of loans for third home purchases and higher down payments for the purchase of second homes.

In June, overall housing prices in 70 major Chinese cities rose 11.4 percent from a year earlier, compared with 12.4 percent in May, according to the National Bureau of Statistics.

Editor:Xiong Qu |Source: China Daily

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