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Construction keeps pace with home demand

By Li Jiabao (chinadaily.com.cn) Updated: 2012-05-22 16:48

The land area of real estate projects under construction in China has reached about 400,000 hectares, which will keep up with housing demand over the next 10 years if the lands are fully developed, according to data from the Ministry of Land and Resources.

If undeveloped or underdeveloped land is made into commercial residences over the next two to three years, it could not only supply more than 70 million 90-square-meter apartments to accommodate more than 200 million people, but it would also begin to stabilize long-term property prices, according to a report from the China Land Surveying and Planning Institute.

Southern Metropolis Daily quoted an unnamed official from the ministry who said that the ministry will seek out property that is not developed or under construction to speed up real estate development and increase the supply of housing on the market.

However, developers, who are suffering from a tightened capital chain, are less focused on acquiring more land and more concerned with increasing home sales to replenish their capital. Capital supply is still the major force determining whether land reserves can be effective at controlling property supply, the newspaper citied analysts as saying.

"Some developers are not only rushing to sell houses but also selling lands for fast capital return. Only when capital is returned can new properties be developed," Yu Lifeng, an analyst from Guotai & Junan Securities Co Ltd, told the newspaper.

lijiabao@chinadaily.com.cn

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