Economy

Ministry to come out with list of land hoarders

By Hu Yuanyuan (China Daily)
Updated: 2010-08-17 09:26

A worker walks past a building under construction in Shenyang, Liaoning province. [Lin Muchu / For China Daily]

BEIJING - The Ministry of Housing and Urban-Rural Development will work closely with other relevant ministries and regulators to identify and publish the list of developers who are hoarding land for speculative purposes, sources said on Monday.

The move is expected to categorize developers into two broad categories - those who follow the relevant regulations and those who do not.

The ministry of housing has already submitted the list of "good" realtors to the banking regulator, said a China Business News report on Monday quoting unnamed sources.

At the same time, the plan also indicates that the government is committed to checking the rampant speculation in the sector and will continue with its tightening policies at least for now.

The list is also expected to help the banking regulator assess the financing risks and take appropriate steps to safeguard lenders.

The Ministry of Land and Resources had earlier this month come out with a report, which identified the existence of nearly 1,457 idle land parcels in the nation this year.

"All these measures indicate that the government will not let its guard down," said Qin Xiaomei, chief researcher with property consultancy Jones Lang LaSalle Beijing.

The China Real Estate Association had in a proposal submitted to the State Council and the regulators recently, suggested that more tightening measures should be avoided to reduce apprehensions that prices are fluctuating wildly.

"With price growth in key cities and property sales falling, the government does not have to launch any more tightening policies in the short term," said Zhu Zhongyi, vice-chairman of the China Real Estate Association.

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Housing prices in the nation's 70 major cities grew 10.3 percent year-on-year last month, down from 11.4 percent in June and 12.4 percent in May, according to the National Bureau of Statistics. The figure marked the slowest growth pace since February this year.

Qin, however, feels that the property prices in key cities are still high, and it is necessary for the government to continue with the already launched policies like prohibiting developers from hoarding land parcels.

Pan Shiyi, chairman of SOHO China, a commercial property developer, said the key reason why developers hoard land is for fast appreciation. Legal disputes over land transfer, revised plans of the local governments and the fascination for companies that own huge land banks in the capital market are also contributory factors.

According to Pan, the best way to stem property price rises in the nation is to build apartments on the idle land as quickly as possible.

"With more land parcels being left idle, new supplies in the market will also dry up. This will not only push up land prices, but also housing prices," said Pan.

Based on current estimates, nearly 9,000 hectares of land can produce at least 100 million square meters of apartments. Commercial housing sales in China stood at 940 million sq m last year.