Since the central economic work conference held in December 2016 first proposed that “the house is for living, not for speculation” (hereinafter referred to as “the house is not for speculation”), this policy has been the guiding principle in the field of real estate regulation for several years, and “the house is not for speculation” will continue to adhere to and persist for a long time during the “fourteenth five year plan”.
Recently, in an interview with Xinhua news agency, the relevant person in charge of the Ministry of natural resources once again stressed the “housing without speculation”, and reiterated the decision-making deployment of “three stabilities”, that is, to stabilize land price, house price and expectation.
In this “three stabilities”, stable land price is undoubtedly the basis of the latter “two stabilities”. Some research results show that land cost is an important component of real estate cost, accounting for about 40%. Although many places are introducing control measures to stabilize house prices, if the land price is not stable, just like the price of flour, the basic material for cake making, it is difficult to stabilize the price of cake.
According to the data from the Ministry of finance, in 2020, the national revenue from the transfer of state-owned land use rights was 8414.2 billion yuan, up 15.9% year on year. In addition, according to the data released by relevant research institutions in late February, in less than two months this year, the “land sale” income of 50 cities with the highest land transfer income has reached 473.5 billion yuan, up 42% year on year, and the land finance is still hot.
To stabilize the land price, the first thing to do is to reduce the local dependence on land finance and establish a new concept of development. As an important part of financial revenue, the land transfer fee in government fund revenue plays an important role in the financial revenue of many cities. For some places, it needs huge investment to improve the urban appearance and ensure the people’s livelihood. Selling land is undoubtedly the fastest and most effective way.
But now many places have come out of the dilemma of excessive dependence on land finance. Some research data show that in 2020, the average dependence of national cities on land income is 31.5%, and the dependence of Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou is much lower than the average. However, some emerging cities’ dependence on land income is as high as nearly 55%. The experience of cities with less dependence is worth learning.
Secondly, to stabilize land prices, we should maintain a sustained and stable supply of land and maintain a reasonable degree of growth. Since last year, the Ministry of natural resources has put forward an important requirement for key cities, that is, to steadily and reasonably increase the supply of residential land, to ensure the scale of land supply as the first requirement, and to continue to increase the supply of residential land in key cities this year.
To increase the supply, we should also digest the stock. According to the data from the Ministry of natural resources, the area of residential land supplied but not completed in key cities is about 5.5 times of the average transaction volume completed in recent five years, and the area of uncompleted land deducted from the sales license is about twice. To a certain extent, some of the land is idle, waiting to be sold. After obtaining the land development right, the government, as the transferor of the land, can take measures such as taking back the land for free if the construction is not started within a certain period of time. In 2020, Sanya City of Hainan Province will complete 42 cases of land disposal with a total of 2451.27 mu. It is self-evident that the disposal of idle land, increasing development efforts and increasing the market supply of housing are of great significance to stabilize housing prices.
The third is to change the way of land transfer and increase the transparency of information. To stabilize market expectations, we need not only a reasonable supply and demand relationship, but also full information disclosure, so that all kinds of market players and consumers can fully grasp the relevant information.
For the former, “centralized land supply” is a way that can be explored, including “two centralizations”, that is, centralized release of transfer notice and centralized organization of transfer activities. This is to force the local government to work out the land supply plan through the supply side reform, including the batch, time and scale of land supply, and determine the adjustment of the land supply plan according to the market heat. For real estate development enterprises, there are also more plots to choose, which helps to reduce the overall market bidding heat. For the latter, the full disclosure of residential land supply information, including stock information, to all kinds of market entities and consumers is also more conducive to the rational choice of buyers. As a matter of fact, as of November last year, key cities have been announced as required.
In a word, the healthy development of the real estate market is related to the national economy and the people’s livelihood, “real estate and housing without speculation” is the basic guideline, and stable land price, stable house price and stable expectation are the working methods. Among them, stable land price is the foundation, which requires not only the standardization of policies, but also the transformation of local government’s development mode and thinking, as well as the full disclosure of information and the rational thinking of consumers.