Chinese land supply drops to lowest in 4 years
Chinese land supply drops to lowest in 4 years
In some cities, the government is deliberately reducing residential land supply
Real estate land supply in China stood at 71,000 hectares in the first nine months of 2016, a 7.8 percent year-on-year decrease, the country’s Ministry of Land and Resources revealed Tuesday.
Real estate land supply this year may be the “lowest since 2010,” a decline that would have an impact on housing supply in the next two years, according to financial magazine Yicai, citing ministry data.
Supply of residential land slid by 8.4 percent to 47,900 hectares, Yicai added. Real estate land supply in the country last peaked at 203,200 hectares in 2013.
More: China’s residential market to stay strong in 2017, says Citigroup
Land prices have risen in consonance with the declining supply. The average cost of residential land in more than 100 major Chinese cities hovered at CNY5,781 yuan (USD852) per square meter in the third quarter of the year, a 6.77 percent increase from the same period last year, the ministry revealed in a separate report released Friday.
Experts believe such prices are caused by declining land supply allocations in major tier-1 cities, especially Beijing, where the government has increasingly clamped down on selling parcels to enthusiastic “land kings.”
“Instead of thinking of the whole market as a big bubble, it is more accurate to view it as a supply-demand mismatch,” Larry Hu, head of China economics for Macquarie Securities, told the South China Morning Post.
Even with local governments announcing differentiated property curbs over recent weeks, it has become difficult to “adjust and control the market” because the real estate land market has diverged, ministry researcher Wang Jianwu said.
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Source: Property Report