The Beijing municipal government plans to increase land supply over the next five years in a bid to further cool residential property prices and satisfy housing needs, according to a statement published on its website over the weekend.
From 2017 to 2021, Beijing plans to build up to 1.5 million housing units on land parcels covering a combined 60 million square meters, equivalent to more than 8,000 soccer fields. The plots of land, located in the city’s southern and northern suburban areas, will account for more than 70% of the total land allocated for residential building.
The move represents the latest adjustment to land supply after the Beijing city government rolled out a series of restrictions in March targeting homebuyers amid sky-rocketing house prices.
The average property price in Beijing shot up more than 63% to 60,738 yuan ($8,820) per square meter in February, from 37,221 yuan in October 2015, the China Securities Journal said in a recent report, citing data from industry group China Real Estate Association.
The red-hot property market prompted the government to introduce new measures to contain the buying frenzy, including higher down-payment requirements for second homebuyers and tighter scrutiny of buyers’ credit and tax payment records.
Under the new plan, Beijing will double its land supply this year to 12 million square meters to construct 200,000 units with property rights for use as buyers’ homes and 100,000 units for rent. The 300,000 total units will meet the city’s housing needs in 2017, the government said.
The ample housing supply introduced by the government’s plan will help ease tension between housing supply and demand and prevent prices from further increasing, Zhang Dawei, chief analyst with Centaline Property, told Caixin.
“The purpose of increasing land supply for residential developments is to safeguard and improve people’s livelihoods,” said an Urban Planning and Land Resources Commission official. “The government will guarantee basic housing services, while the market will satisfy needs in multi-social layers.”
However, Zhang also stressed that whether real estate prices could be stabilized hinged on the implementation of the set targets.
By Pan Che