Beijing further reins in real estate
Updated: 2007-10-22 10:58
Circular 39 also mandates that the period for land held in reserve without development will be limited to three years, the first time the Ministry of Land and Resources has released detailed rules on the period of time for completion of a project.
"With strict implementation, the notice may put an end to super large-scale land deals and partly deter developers' urge to acquire land," says Wang Yongxin, associate director of investment department of DTZ, an international real estate services firm.
This year's "land king" could be a 780,000 sq m parcel in Changsha planned for development by Beijing North Star and Beijing Chengkai. The companies bid 9.2 billion yuan (US$1.2 billion) to win land rights, 4.56 billion yuan more than the starting price.
With a construction size of nearly 2.9 million sq m, industry experts say the companies will need all their financial clout to finish development of the Changsha project within three years.
"Circular 39 will not be the last for in a series of government tightening polices," says an industry observer who declines to be named. "There will be more if the property market remains so absurd."
By August China's urban property prices had risen 8.2 percent this year, further stoking government concerns that housing might become unaffordable for lower-income people.
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