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China to increase land supply for housing to guide property market

2010-04-16 11:18 BJT

BEIJING, April 15 (Xinhua) -- The Chinese government said Thursday it plans to increase the land supply available for residential property, in a bid to guide the country's runaway property market into more healthy development.

China will supply 180,000 hectares of land nationwide to build houses this year, excluding the Tibet Autonomous Region, compared with an area of 76,461 hectares in 2009, the Ministry of Land and Resources (MLR) said.

Areas for low-cost housing, renovated shanty houses and small- and medium-sized apartments will be allocated more than 70 percent of the total land supply, the ministry said.

In breakdown, areas for small- and medium-sized apartments alone would reach 80,431 hectares this year, exceeding China's total land supply in 2009.

Some 35,786 hectares would be allocated for renovated shanty houses, accounting for 19 percent of this year's total land supply.

Areas for low-cost housing, consisting of affordable housing and low-rent housing, would be given 24,454 hectares, more than double the 2009 figure.

The central government vowed to build three million low-cost apartments for low-income families and renovate 2.8 million shanty houses at the Third Session of the 11th National People's Congress in March this year.

"We merely need 12,000 hectares to meet the goal set by the central government to build the three million low-cost apartments, well below this year's planned land supply for this part," said Liao Yonglin, director of the department of land use management of the MLR.

Experts said increasing land supply is part of the government's efforts to cool the overheated property market.

"The sharp increase in land supply for residential property will suppress land grab by developers and stabilize public expectations about housing prices," said Dong Fan, director of the research center of property market under Beijing Normal University.

Liao Yingmin, researcher with the Development Research Center of the State Council, said: "Increasing areas for low-cost housing, renovated shanty houses and smaller houses is conducive to boosting housing supply and satisfying demand of mid- and low-income families."

China has begun to take moves to curb the excessive growth of home prices since late last year, including a sales tax on homes sold within five years of their purchase and raising down payment requirement for families buying a second or more houses with bank loans.

However, these measures appeared ineffective in preventing housing prices from rising further.

Home prices in China's 70 large- and medium-sized cities including Beijing, Shanghai and Guangzhou increased 11.7 percent in March from a year earlier, the National Bureau of Statistics (NBS) said Wednesday in a statement on its website.

"This year's plan has better supply structure than before as it stresses the supply for low-cost housing and smaller apartments," Liao Yonglin said.

The central government said late Wednesday the down payment for first-time home buyers whose apartments' floor areas exceed 90 square meters would be raised from 20 percent to 30 percent.

It also required second-time buyers to pay at least 50 percent of the purchase price as down payment and loan rates should at least be 110 percent of the benchmark interest rates.

"These measures demonstrated the government's determination to rein in runaway property market. And I hope it can roll out better-targeted policies in the future to rein in speculation and keep housing prices at a reasonable level," Liao Yingmin said.

Editor: Zhang Ning | Source: Xinhua