Ban on villas to be strictly implemented
By Jiang Zhuqing (China Daily)
Updated: 2006-06-01 08:49
A ban on land allotment for building villas will be strictly implemented, the
Ministry of Land and Resources (MLR) announced yesterday adding more muscle to
recent government moves to cool down the property market.
A
statement by MLR Vice-Minister Wang Shiyuan urged governments at various levels
to "immediately" halt the approval of land supply for villa construction; and
make a structural adjustment of land supply.
Although a ban on land
approval for villas was imposed three years ago, when Beijing moved to slow down
the rise of some macro-economic indices, nationwide implementation has been
inconsistent; and indifferent in some places.
According to Shu Kexin,
vice-director of MLR's land use department, many local governments have given
the green light to luxury-housing estates which did not use the word
"villas."
"The country cannot afford construction of large villas to meet
the demand of a few high-end customers while sacrificing the interests of the
majority," Shu said.
Shu also pointed out that the rapid increase of
housing prices in many places was a result of a poor balance between supply and
demand, and not because of limited land supply.
There is a misconception
that land makes up a big chunk of property prices but, for instance, they
account for only 6-8 per cent of real-estate prices in Beijing, he
said.
To cool down the overheated market, the central government on
Monday announced a package of policies, including raising mortgage down payments
from 20 to 30 per cent on units larger than 90 square metres; and requiring that
70 per cent of all houses be smaller than 90 square metres.
Priority in
land allocation will be given to projects building mid- and low-price or
small apartments.
At the same time, MLR officials said, information about
land supply and use will be made available to the public.
Vice-Minister Wang pledged that land authorities would work together
with the Ministry of Supervision to investigate irregularities in
housing-related cases.
Meanwhile, the State Administration of Foreign
Exchange (SAFE) yesterday did not, as widely speculated, announce any
restriction on foreigners purchasing property which has been a rising
trend in recent years.
Financial experts have been calling for curbs
because of significant amount of foreign money entering the property
market.
According to a SAFE report, FDI inflows last year were US$79.1
billion, showing a year-on-year increase of 44 per cent. Of this, US$3.4 billion
was spent on houses by institutional buyers.
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