Economy

China to double land supply to cool housing market

(Xinhua)
Updated: 2011-05-13 10:53

BEIJING -- The Chinese government will increase its supplies of available land for residential housing development this year as part of the country's efforts to curb its runaway property market.

China plans to have 218,000 hectares of land available for housing development in 2011, nearly double the amount available in the previous two years, the Ministry of Land and Resources (MOLAR) said at a press conference in Beijing on Thursday.

"We are planning to have a large amount of land available this year in order to ensure that our goal of building 10 million afforable housing units can be achieved," says Liao Yonglin, director of MOLAR's land use and management department.

Prices of commerical homes have almost doubled in China's biggest cities over the last two years, due to increased lending and speculation during the global economic downturn. This has triggered complaints from would-be home buyers who can't afford the higher prices.

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The price hikes have also raised fears of the creation of a real estate bubble.

The Chinese government has adopted a series of tightening measures to guard against speculation, including higher down payments and the implementation of trial property taxes in the cities of Shanghai and Chongqing.

The central government has also announced a plan to build 36 million affordable housing units for low-income families over the next five years.

In the meantime, housing prices for April continued to rise in 77 of the 100 cities currently being monitored by the China Index Academy, a private Beijing-based company that studies China's property market.

Only 22 cities, including Beijing and Tianjin, reported month-on-month declines in April, according to the company.

China's central bank, the People's Bank of China, has made the situation more difficult for prospective homeowners by increasing its benchmark interest rates twice since the beginning of this year. This has caused the cost of borrowing to increase, says Chen Sheng, president of the China Index Academy.

"I think a better way for the government to cool the property market would be to increase the available number of small- and medium-sized commercial housing units," Chen says.

The National Bureau of Statistics (NBS), China's top statistics agency, will release April's real estate figures for 70 Chinese cities on May 18.

According to NBS data, 12 Chinese cities saw month-on-month declines in housing prices in March due to the government's tightening measures, compared to eight cities that reported declines in February.