Land supply grows 48pc as Beijing cools market
Beijing's policymakers have increased land supply by 48 per cent so far this year and ordered local authorities to keep a closer eye on foreign capital flowing into real estate investment as the government seeks to rein in rising property prices.
For the first 11 months, land supply across the nation climbed to 128,200 hectares, according to the data released by the Land and Resources Ministry.
Of the total, development sites for housing rose 51 per cent from a year earlier to 95,600 hectares.
At the same time, the Commerce Ministry instructed local governments to halt approval of some foreign property investment to curb speculative buying.
International property consultant Knight Frank said most of the major mainland cities it monitored posted month-on-month declines in the total transacted area of new homes, with Guangzhou sales plunging 65 per cent. The 10 mainland cities monitored by Knight Frank include Shenzhen, Shanghai, Beijing, Chongqing and Shenyang.
'We believe the decline (in sales) was due to the widening and increasingly prominent effectiveness of the government's new tightening measures. An increasing number of cities started to implement central government policy on restricting home purchases, while the recently tightened monetary policy may also have affected market sentiment,' it said.
Knight Frank said the measures were more effective in slowing property sales than in dragging down prices.
Last month, the average prices in the 10 cities saw a 1.3 per cent rise from October, it said.
The central government has introduced several measures aimed at cooling home prices this year, including suspending mortgages for third-home purchases, tightening the limit on new-home purchases and pledging to speed up trials for a new property tax.
On October 19, the People's Bank of China raised the benchmark interest rate by 25 basis points for the first time in three years. Banks have also increased their preferential mortgage rates from 70 to 85 per cent of the benchmark rate, effectively raising the rate borrowers have to pay.
Noting a surge in land value in selective cities, particularly for prime sites in major cities, the Land Ministry plans to strictly implement the austerity measures to stabilise prices.
As land supply increases, revenue from land in some major cities might hit a new record, the Land Ministry said.
The Beijing government is expected to reap more than 150 billion yuan (HK$175.59 billion) from land sales this year, Xinhua reported yesterday.
According to data compiled by Centaline Group, land income for 12 mainland cities totalled 700 billion yuan as of December 16, 28 per cent higher than for the whole of last year.
Vanke China, the mainland's largest listed developer, has spent more than 53 billion yuan on land acquisition so far this year, 82 per cent more than for all of 2009, while Poly Real Estate has paid 43.7 billion yuan replenishing its land bank.
As major developers generate good response to sales, analysts said they would continue snapping up development sites for further expansion.