Land supply rise unlikely to affect high-end home prices
Beijing and Shanghai are seeing a large flow of land into the property market in the fourth quarter of the year but property consultants said the coming releases - mostly in suburban areas - were unlikely to have a significant impact.
Beijing Land Management and Reserve Centre on its website said that 22 more sites are waiting for release, measuring a total area of 2.4 million square metres.
'Most of these sites are in suburban and surrounding areas, so no matter how many such sites are released, high-end housing prices in the central areas won't be affected much,' said Nicholas Cho Nim-kwok, the director of the investment department of DTZ Debenham Tie Leung (Beijing).
In the first half of the year, the city released 30.8 million sqmetres for tender and public bidding. Twelve sites with 2.3 million sqmetres of area are still awaiting bids or tenders. Among them, 10 sites have received no tenders.
Most are in the suburbs of Fengtai district, the outskirts of Huairou and Fangshan districts.
If targets are met for the Beijing Municipal Bureau of Land and Resources' land supply plan set in April, 65 million sqmetres of land will enter the market, 16 million sqmetres will be for residential development.
However, as the end of the year approaches, the Beijing city government may not be able to meet that target, observers said.
'The government can easily meet the target by offering large tracts of land in the suburban areas with little effect on high-end housing prices in the city,' Mr Cho said.
In the meantime, Shanghai is also moving faster on releasing sites for tender.
Last month and in August, the Shanghai Houses and Land Resources Administration Bureau released two batches of 20 sites for tender.
In the most recent release, 20 state-owned sites with an area of 1.76 million sqmetres were made available. Seven sites - or 65 per cent of the total area - were designated for residential development.
In the Baoshan, Jiading, Minhang and Pudong districts each contain two or three sites.
The four districts are among the five that will focus on new houses in the latest 11th five-year plan for housing construction, released by the Shanghai Municipal government on September 30.
'I believe there will be a trend for more land in those areas,' said Steven Liu Yuanting, the director of research and advisory services at Cushman & Wakefield.
'The government's focus now is to build more affordable houses; also land for residential development in the central area is scarce,' Mr Liu said.
'Most of the land that overseas developers have in their land banks are for luxury housing or villa developments, but they now have a growing interest in ordinary housing projects; and with more sites on the market this will create more competition among developers.'
