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Guangzhou plan to boost homes supply

Move will reassure buyers and control prices, says analyst

Guangzhou will release enough land over the next five years to increase the city's new housing supply by almost 25 per cent in what an analyst says is an effective measure to reassure buyers of continued supply and to control prices.

The Guangzhou Land Resources and Housing Management Bureau plans to increase the supply of new houses in the 11th Five-Year Programme (2006-2010) to 562,400 homes covering 53.5 million square metres, up from the 42.9 million square metres supplied in the past five years.

Over the weekend, state media reported that both Shanghai and Beijing were in the process of introducing new measures to increase the supply of low-cost housing.

For more than a year, the central government has urged local authorities to rein in soaring property prices, especially in big cities like Shanghai and Beijing, and increase the supply of affordable housing for low-income families.

Long Bin , an analyst at Man Tang Hong real estate brokerage, said the increased supply would help stabilise the market.

'There won't be any immediate impact but it provides a forecast of adequate houses and land. People were panicky but now they can see what type of houses will be available and when,' he said.

Mr Long said, however, that prices of properties in the city centre were expected to remain firm and even edge up gradually because the supply of inner-city land was not as great as in suburban areas.

Property agents said the market had been relatively quiet in the past few days. 'I think it's because there are no new properties to view. Many developers were trying to get their projects ready in time for viewing during the golden week holidays but failed to make it,' said Li Xin , associate marketing director at Le Palais.

A total of 37.49 million square metres was allocated to build units of up to 90 square metres which were intended to be the driving force of the property market. The units will be in areas with convenient transport links.

The supply of cheap rental housing built by the military and other work units will also increase over the next five years, with 9 million square metres of land set aside for the construction of 114,300 units.

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