A senior Ministry of Housing and Urban-Rural Construction official has said officials’ ability to keep real estate prices stable and affordable will be a major criterion in deciding their performance and career prospects.

Shen Jianzhong, the director of the real estate department of the ministry said, ‘We should be setting up an accountability system for governments and officials soon.’

The newly approved ministry, to replace the Ministry of Construction, is responsible for realizing China’s new housing policy targeted at ‘ensuring everyone is sheltered’.

Shen said local government officials should monitor housing prices to prevent price volatility and ensure that homes remained affordable, but he did not provide details of the accountability system.

Shen said the country is still faced with mounting pressure from real estate price hikes as supply cannot meet rising demand. The land available is limited, which has a big impact on housing prices,’ Shen said.

Qi Ji, the vice-minister of construction, said the central government has decided to allocate 70% of land supply this year to build homes for middle and low-income families and the needy.

He added, ‘Local governments are also required to increase funding in this area.’
Source: China Daily

Shanghai has launched a unified land trading market with a mission to help stem corruption in related transactions across the city.

The Shanghai Municipal Land Trading Market has been inaugurated with 3,000 square meters of space in the Lujiazui area of Pudong New District.

Its main concerns are transfers and leases of land use rights for commercial developments or industrial purpose, division and transfer of the use rights of large patches of land for development, housing construction and the transfer of land accompanying it.

The market is connected to land trading departments in the city’s 19 urban districts and suburban counties. In these departments potential buyers can obtain full and objective information about all land resources that are put up for trading at the market.

The land ’shopping mall’ or market means all land transactions will now occur in an open and unified platform. Experts believe the measure can further regulate Shanghai’s real estate market.

Data from the National Bureau of Statistics shows 70 cities saw their land price increase over 12% on average in the first three quarters of last year. In China’s commercial capital Shanghai, the city’s downtown Huangpu district was selling for RMB67,000 per square meter last August.

Nie Meisheng, Chairman of China Real Estate Chamber of Commerce and shown here, said ‘The main reason for the price surge was the closed transaction system. There were irregular activities in every process of the system, so prices went up step by step during the transaction process. If the land prices cool down, property prices will also be under control.’

Experts also say the openness of land transactions can help stabilize land and housing price in the long term. It can also curb land hoarding.

Nie Meisheng said ‘Property developers have to offer enough money to buy the land. Should the bids be public and transparent, developers are not able to stock up much land.’

Although last quarter experienced a slow down in the property sector, China’s real estate market overall has been witnessing a boom over the past few years. Land and housing prices have soared amid robust demand from both speculative investors and end-users. It is though that Shanghai’s new land market will help ensure that any growth in the city’s real estate sector, will be steady and well regulated, in going forward.
Source: CCTV.com

As China’s government attempts to cool property prices with limits on lending, developers are in a land grab. The National Bureau of Statistics said Li Ka-shing, who made his fortune in Hong Kong real estate, Chinese billionaire Xu Rongmao (seen in our illustration), who owns Shimao Property, and hundreds of local developers boosted investment 29% in the first eight months of 2007.

Eugene Kim, chief investment officer of Hong Kong-based Tribridge Investment Partners, a $200 million hedge fund, came up with a cheery view: ‘If the government decides to impose further restrictions, most if not all of the developers will go bankrupt, depending on the severity of the restrictions. That makes us very selective in terms of which bonds we buy and the spreads we require to compensate for risk.’

According to a National Development and Reform Commission survey home prices in Shenzhen were 18.6% higher in November than a year earlier. In Beijing the rise was 14.9% and in Beihai, in Guangxi province, 16.4%.

The People’s Bank of China last month raised its benchmark one-year lending rate to a nine-year high and increased reserve requirements to the highest it has been since 1998. In September the government increased the minimum down payments on apartments from 30% to 40%.

Signs of a reaction have started to appear. The nation’s largest publicly traded developer, Shenzhen-based China Vanke, sold property worth RMB4.23 billion ($582 million) in November, 18% less than in October.

Clara Lau, an analyst at Moody’s Investors Service in Hong Kong, said Chinese developers are among the most vulnerable of any group in Asia to downgrades because a slowdown in home sales would deplete cash.

She explained the rush to buy land: ‘They have been growing aggressively, with the view that if they don’t buy now, it will be more expensive for them later.’
Source: Bloomberg

In a bid to control land use the government has banned urban Chinese from buying residential land or houses from farmers. An executive meeting of the State Council, China’s cabinet, warned that policies on rural land use will be strictly enforced.

State Councilors urged local governments to strengthen rural land management, improve the village and town planning and tighten control over the construction of farmers’ homes.

Farmers’ homes shall be built primarily on land that is idle or approved for housing and the policy that each rural household is allowed to have only one patch of housing land would be rigidly enforced.

Urban residents are forbidden from buying housing land or homes from farmers, and work units and individuals are prohibited from renting or occupying rural land for real estate development.

The meeting was presided over by Premier Wen Jiabao and State Councilors were ordered to see that government departments strictly examine land use plans and rein in sprawling urban projects.

China is facing a sharp conflict between land supply and demand, and the area of arable land, which had shrunk by 4.6 million mu from the end of last year to 1.827 billion mu, was only slightly above the minimum of 1.8 billion mu (120 million hectares) set by the government.

State Councilors said the government needed to set up the most stringent land management system, take strong moves against land waste and promote land saving and better planning.
Source: China.org.cn

Hong Kong-listed Agile Property has bought four land sites at Huadu District in the southern Chinese city of Guangzhou for RMB920 million (US$124.2 million).

The total site area of the project is 283,000 square meters, with a gross floor area of 529,000 square meters, giving an average GFA (which stands for Gross Floor Area although why Reuters insists on using obscure acronyms wonders me) cost of RMB1,740 per square meter, which it said was competitive in the market.

Agile plans to develop the land into a community with schools and commercial facilities.

The land is in a prime location, with convenient facilities and good transport connections.

Meanwhile, Shui On Land has won a bid for a plot of land in China’s southern city of Foshan for RMB7.5 billion ($$1.02 billion) for redevelopment.

The land covers an area of about 639,320 square meters and will be redeveloped into a comprehensive mixed-use community with office, retail, hotel and cultural facilities and residential properties.