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In the first half this year, land supply has increased dramatically over the same period in 2009. Is the extra land affecting the housing market, and perhaps driving property prices downwards? We find out more from the Ministry of Land and Resources.
The Ministry of Land and Resources says land supply designated for housing construction rose almost 60 percent from January to May, over the same period last year. This may lead to an overall adjustment in the third quarter.
Xu Shaoshi, Minister, Ministry of Land and Resources, said, "I assume that the market will experience adjustment in the third quarter. But the degree may vary from place to place. The price will definitely go down. Again, the degree is hard to predict."
In the first quarter this year, land collateralized for loans increased by 730 hectares, to around 220-thousand in total. Meanwhile, loans issued against such land climbed to 2.8 trillion yuan, a potential risk. The land ministry says it will work with the banking regulator to restrict the approval process for loans issued against collateralized land.
Xu said, "We share information with the banking regulator and banks. They can review asset quality and legal issues to decide whether to approve the loans or not."
The minister also says his department will guarantee land supply for low-income housing construction, and take measures to penalize developers who hoard land.