Urbanisation expected to drive down home prices
Real estate experts say a freer land transfer system is required if the mainland is to successfully integrate residents from rural areas
The mainland’s urbanisation push will drive down home prices as the government allows freer transfer of vast areas of rural land and steps up efforts to help farmers integrate into city life, property sector experts said.
Exactly how the authorities will redefine urbanisation is anyone’s guess, as the mainland’s top economic planner is still finalising a proposal for submission to the State Council.
However, earlier comments from top leaders and a communiqué issued after a key Communist Party meeting that ended on Tuesday offer some clues and indicate that it is more about ensuring the quality of people’s lives instead of the pace of growth.
“China’s home prices will stabilise in the next few years,” said Huang Yu, an executive deputy dean of the China Index Academy, a private real estate research institute and data provider.
Reform allowing farmers to eventually sell their land for urban development would increase the supply of land for home construction, and proceeds from land sales would give farmers a chance to buy new homes on the outskirts of cities, even though prices in core urban areas would remain unaffordable to them, Huang said.
The third plenum of the party’s Central Committee decided to “establish a unified urban and rural land market for construction” and to “give farmers more property rights”. That confirmed previous pledges from the country’s top leaders to step up efforts to narrow the gap between urban and rural areas.
Data from the National Bureau of Statistics showed farmers’ average annual income was 7,917 yuan (HK$10,074) last year, compared with a per capita urban disposable income of 24,565 yuan.