• Mon
  • Dec 22, 2014
  • Updated: 8:43am

Guangzhou to increase land supply

PUBLISHED : Wednesday, 17 May, 2006, 12:00am
UPDATED : Wednesday, 17 May, 2006, 12:00am
 

Guangzhou will greatly boost land supply this year in a bid to cool the rocketing property sector, but experts say the measures may not work as much of the land is in less-popular suburban village areas.


The Guangzhou Land Resources Bureau's housing management said 80 parcels of land, totalling 8.5 million square metres, would be released this year - representing a six-fold increase from 1.1 million square metres last year and the biggest offer in nine years, state media reported.


Of the total, only 1.97 million square metres would be made available in the eight urban districts of Yuexiu, Liwan, Tianhe, Haizhu, Baiyun, Panyu, Huadu and the university town on Xiaoguwei island. The suburban townships of Conghua and Zengcheng will supply the most land.


Of the 8.5 million square metres, 6.93 million square metres will be for residential projects and the government could supply only 10,000 square metres of land in each of the two highly popular districts of Liwan and Yuexiu.


Real estate agent Li Xin said it was good to increase land supply as the tight supply policy of the past had contributed to the surge in property prices.


'Monetary policies alone are not enough to cool the market. The role of the government in supplying land is crucial. So little land has been auctioned that as soon as there was an auction, property developers rushed to tender and pushed up their bids to get the land,' she said.


But the impact of the measure depended on where the government was providing the extra land.


'It won't be so effective if the land is in Fangcun or Huadu, but there is no more land in the city centre. For people to be willing to move out, the government has to improve public transportation,' she added.


Elyn Qi, who paid a 30 per cent deposit for her small apartment yesterday, said she was lucky that she had help from her parents.


'For those who need a bigger apartment, downpayments would pose a major problem,' Ms Qi said.


The measure comes as speculation mounts that the People's Bank of China (PBOC) will introduce measures requiring buyers to pay up to 50 per cent of a home cost in cash.


The PBOC has denied the speculation, but bankers and real estate industry sources said they believed officials were testing market reaction to the idea as well as signalling the bank's intention to crack down on speculators.


'We believe 30 to 40 per cent is possible. Fifty per cent is too high,' said one foreign banker. 'We think the central bank is testing the market and sooner or later they will take measures.'


CB Richard Ellis director Louis Chan said that lowering the maximum loan amount would help cool the market but raising the cash payment to 30 or 40 per cent would not make a big difference.


Ms Li said the government was likely to make a distinction for first-home buyers.


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