Land sale law tightened on the mainland
Developers cannot acquire land in the mainland through a bilateral agreement with local governments under a new land sale requirement that takes effect today.
To make the sale and use of land more transparent, the Ministry of Land and Resources requires public land be sold through open bidding.
'It is a good move. The public land sale system gives a clearer record of future land supply in the market,' Centaline (China) general manager Phinex Wong said.
'Before the new requirement, most land was sold through private negotiation and disclosure was not necessary. Developers and property professionals were unable to predict market outlook without [that] information,' he said.
In March, the ministry issued a directive saying that the government would after August 31 confiscate all land that companies had bought before July 1, 2002, but had not yet developed.
There are 47,000 hectares of land across the country in this category, according to the ministry.
In Shanghai, 9,000 hectares of land fall into this category, according to official estimates.
Jun Tang, executive director and president of mainland developer Beijing Capital Land, expected land supply to shrink with the cancellation of land sale negotiations.
'There will definitely be less supply as developers have one less channel to obtain sites,' Mr Tang said.
Under the new requirement, the government will confiscate land that companies acquire but do not develop two years after purchase.
Developers must pay a land price immediately after the purchase.