Fri, Dec 24, 2010 - Page 11 News List

China boosts land supply, reviews foreign investment


China increased land supply this year and stepped up the scrutiny of real-estate investments by foreign companies as it rolls out more measures to contain 18 months of gains in property prices.

China’s land supply rose 48 percent to 128,200 hectares in the first 11 months, while sites for residential developments surged 51 percent, the Chinese Ministry of Land and Resources said in a statement. The Chinese Ministry of Commerce ordered local authorities to halt the approval of some foreign property investments to curb speculative buying, it said in a Nov. 22 statement that was posted on its Web site on Wednesday.

Home prices in 70 Chinese cities climbed 7.7 percent last month from a year earlier, even after the government raised borrowing costs for the first time in three years, suspended mortgages for third-home purchases and pledged to introduce a property tax. Sales volume jumped 15 percent.

“The pace for land acquisitions in the private sector will slow next year,” said Johnson Hu (胡繼中), a Shanghai-based property analyst at UOB Kay Hian Investment Co. “The government is tightening lending on one hand, but on the other, it’s launching new land supplies.”

The Ministry Land and Resources said it noticed high land prices in some areas last month as competition increased. The statement didn’t identify where the locations were. The increased supply will ensure that it meets its target for 5.8 million lower-income homes this year, the ministry said.

A gauge tracking developers’ stocks on the Shanghai Composite Index fell 0.7 percent at the 3pm close. China Vanke Co (萬科集團), the country’s biggest developer, lost 1.8 percent in Shenzhen, and China State Construction Engineering Corp (中國建築工程) declined 1.4 percent in Shanghai.

Land income for Beijing’s city government is expected to exceed 150 billion yuan (US$23 billion) this year, competing with Shanghai as the country’s top seller of property, the official Xinhua news agency reported today.

Chinese developers have met or exceeded their sales targets for the year. China Vanke said this month it became the first Chinese developer to post annual sales of 100 billion yuan, reaching a target it had set for 2014 and defying government measures to cool the real-estate market.

While property prices climbed, the real-estate stocks gauge lost 24 percent this year, twice the decline on the benchmark measure and the worst performer among five industry groups.

The government also told local authorities to strengthen their -reviews of foreign exchange inflows for real-estate transactions and documentation for land rights, according to the statement from the Ministry of Commerce, which oversees foreign investment in China.

“It’s very likely that the government may control foreign currency inflows when it comes to property, say, make the ownership timeframe longer,” Hu said.

Foreign investment in China’s property sector rose 48 percent to US$20.1 billion in the first 11 months, the commerce ministry said on Wednesday last week, more than twice the 17.7 percent increase in the country’s total overseas inflows.

China will step up its review of projects by foreign companies and verify more data for the industry after it noticed faster growth in overseas investments this year, Yao Jian (姚堅), a commerce ministry spokesman, said in Beijing last month.

This story has been viewed 2419 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top