And the Ministry said ‘Let there be land’… and it was so
Beijing orders cities running short on apartments to conjure up more land. Only, as Mark Twain pointed out, they aren't making it anymore
China’s latest ploy against a property bubble that’s threatening to spin out of control: conjure up more land. Cities with less than six months of apartment inventory waiting to be sold must set aside more plots for building high-rise apartments. And be pretty sharp about it, too.
Whether this strategy can do the trick remains to be seen, though the old adage of Mark Twain — “Buy land, they aren’t making it anymore” — might suggest otherwise. The fizziest housing markets, unsurprisingly, tend to be in the most sought-after areas of the most popular cities. Location, location, location, as the saying goes.
However, this is China, so we should expect the unexpected. If anyone can overturn the golden rule of realty, maybe it’s the state planning wonks in the Chinese government.
The joint notice from the Ministry of Housing and Urban-Rural Development and the Land Ministry assigned cities to one of five categories. Those with more than three years of unsold inventory must immediately halt land supply. Cities having 18-36 months of unsold housing stock should reduce the pace at which plots are made available; 12-6 months mandates a pickup in supply.
And for the hottest of hotspots, supply should not only be increased significantly, the pace should accelerate too.