SINGAPORE (EDGEPROP) - China's government will make more land available for developers to increase the housing stock in the world's largest property market, as it keeps a tight lid on runaway prices to ensure that affordability is within the reach of the nation's first-home buyers.
The government will also increase the supply of subsidised rental homes and shared ownership housing to ensure well-regulated development of the long-term rental housing market, and cut taxes and rental fees.
"We will keep the prices of land and housing, as well as market expectations stable," Premier Li Keqiang said in his annual work report to China's legislature in Beijing. "We will address prominent housing issues in large cities [and] make every effort to address the housing difficulties faced by our people, especially new urban residents and young people."
The Chinese government is anxious to prevent any grievances from housing affordability from spilling over into social instability, as it grapples to keep the economy growing amid the coronavirus pandemic. Homes have become so expensive that Chinese couples are putting off having a second baby, undermining government efforts to boost the population, according to a Beike Research Institute survey last November.
China's 20 largest land buyers as of September 2020. Source: CREIS, SCMP
Runaway prices and affordability are listed as "difficulties" in the prime minister's report, the most drastic prognosis on the real estate sector in recent years. Last year's report pledged to "promote steady and healthy development of the real estate market," while the 2019 plan was to "better address housing needs."
Four decades of rapid economic growth has turned the communal housing of Mao Zedong's era into some of the world's tallest flats, biggest private housing estates and most opulent villas, in the process turning China's property market into the largest on earth, with last year's sales value of new homes topping US$2.7 trillion.
Average prices surged fivefold in the past 20 years while major cities like Shanghai, Shenzhen and Beijing have emerged as the world's top 10 expensive places to buy homes. The average price of a new home across 70 cities advanced 6.3 per cent in January for the 35th consecutive monthly increase, according to the data by the National Bureau of Statistics data, used as the national benchmark.
The central government is standardising the auction of land usage rights by local authorities to three a year, eschewing the current random process where municipal or provincial governments can call for tenders - and compete with each other - whenever they need to plug a revenue deficit. As many as 22 city governments including Beijing, Shanghai and Shenzhen will abide by this schedule, according to a notice by the Ministry of Natural Resources last week.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.