Big news out from China Daily. We’re not exactly sure what it means, except that the central government is desperate to slam the brakes on the real estate market and looking to call a time out:—-
Sale of residential land temporarily halted
By WANG QIAN (China Daily)
BEIJING – The Ministry of Land and Resources has ordered a temporary ban on the sale of land for housing in a renewed measure to ease soaring real estate prices.
Yun Xiaosu, vice-minister of land and resources, said local authorities should not sell land for residential purposes until this year’s housing land supply plan is released in early April.
“Residential land supply will increase and low-income housing projects will top local governments’ agendas,” Yun said during a video-conference on Monday.
In his government work report early this month, Premier Wen Jiabao said China will build 3 million housing units for low-income families and renovate 2.8 million shanty units with a total of 63.2 billion yuan ($9.25 billion) allocated this year, a year-on-year increase of about 15 per cent.
“The low-income houses and shanty units must be included in this year’s land supply, while large-sized housing projects must be controlled in big cities,” Yun said.
He emphasised that land used for low-income housing, for rebuilding shanty areas and for self-occupied small- or medium-sized houses must account for more than 70 per cent of the overall supply this year.
“The ministry encourages local governments in second and third tier cities to explore new policies and measures to curb the escalating housing prices,” Yun said.
On March 11, the Ministry of Land and Resources issued a directive ordering developers to take a 50 per cent down payment on all land put up for auction within one month of signing the contract, or they will lose the land along with their deposit.
Shortly after the directive, the State-owned Assets Supervision and Administration Commission of the State Council ordered 78 central State-owned enterprises to quit the housing market on March 18. Only China Ocean Shipping Company, China’s largest group in modern logistics, said it will quit the sector within six months.
On Monday, the administration said that the 78 companies must work out their quitting plans within 15 days.
Since March, a five-month campaign across the country is under way to crack down on illegal land use and land hoarding.
Cao Jianhai, director of the investment and market research office in the Institute of Industrial Economics of Chinese Academy of Social Sciences, said the soaring prices cannot be controlled unless the ministry makes clear the percentage of low-income houses among the overall supply.
“The ministry only guarantees 70 per cent of the overall supply will be used for low-income housing, rebuilding shanty areas and self-occupied small- or medium-sized houses, but doesn’t elaborate the percentage of low-income houses,” Cao said.
“The government is trying to ignore the key point for its own profits,” he added.
Land transfer fees are a major part of the local governments’ annual revenues.
Xie Xuren, minister of finance, said on March 6 that land transfer fees across the country reached about 1,424 billion yuan in 2009, a year-on-year increase of nearly 27 per cent.
Business Insider Emails & Alerts
Site highlights each day to your inbox.