2017-07-11

Chinese Cities Boosting Land Supply: To Stabilize Home Prices or Raise Money?

Last time housing turned down, land sales collapsed. Top-tier cities want to boost land sales this time around, under the guise of stabilizing prices. But are they more interested in boosting revenues in case land sales collapse again? Also consider cities such as Beijing are limiting population growth and even relocating population into the surrounding province.

iFeng: 中国大城市开启大规模供地计划 有利于平抑房价
Shanghai, Beijing, Shenzhen, Fuzhou and other large cities in China recently developed a large-scale land supply plan. In the real estate regulation from the "subtraction" to "add" in the process, the Chinese city will open a new round of large-scale supply to the times?

Shanghai plans to supply 5500 hectares of residential land during the period of "13th Five-Year Plan" (2016 - 2020), which will provide about 1.7 million units of housing, according to the "Shanghai Housing Development" "Twelve Five" period increased by about 60%.

Beijing also significantly raised the supply plan for residential land in the next few years. Beijing officials last month revealed that Beijing will build 1.5 million new homes in the next five years. This is in line with the five-year land supply plan released earlier in Beijing. In this plan, Beijing plans to supply residential land in the next five years, 6,000 hectares.

Shenzhen City, Shenzhen City, the recent housing construction plan in 2017 annual implementation plan, Shenzhen this year will arrange the supply of commercial housing 168 hectares of land, plans to build new construction of 80,000 sets of commercial housing, construction area of ​​7.2 million square meters. Last year, Shenzhen new commodity housing sales of about 40,000 units.

Fuzhou this year to determine the residential land supply plan compared to last year more than doubled, two years after the plan also continued to increase the trend; Guangzhou City 2017 construction land supply plan shows that this year, Guangzhou new residential land of about 5.7 square kilometers, year on year An increase of 19.1%.
Furthermore, some of the cities limited land sales to support home prices in the past:
Large cities, especially Beijing, Shanghai and other large cities to increase the supply of land is undoubtedly conducive to stabilize housing prices. But most of these cities are scarce land resources, lack of capacity for the city. For example, in recent years, Beijing has gradually reduced the supply of land, for many years failed to complete the annual land for the plan. In 2016, the actual supply of residential land in Beijing fell to 469 hectares, less than 40% of the planned completion.
Another possibility: these cities are planning more redevelopment, pushing residents out into the hinterlands to make way for commercial development.

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