Annual Report on Development of Housing Market in China: Rising Turnover and Price in First-Tier City Land Market
Updated: 14.01.14 11:05:42
www.eastmoney.com December 18, 2013 17:06
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The Green Book of Housing Market co-hosted by National Academy of Strategy and Economic of CASS, Social Economic Information Daily of Xinhua News Agency (market zone), Center for City and Competitiveness of CASS, and Social Sciences Academic Press, namely, China Housing Development Seminar under the trend of urban-rural integration, was held today in Beijing. On the conference, the Green Book of Housing Market:Annual Report on Development of Housing Market in China (2013-2014) completed by National Academy of Economic Strategy of CASS was officially released.
According to the analysis by Green Book of Housing Market, the land market differentiation of various cities is aggravating, the first-tier cities and some core second-tier cities are keeping continuous hot with significant rising in both trading volume and price. Some second-, third-, and fourth-tier cities, however, keep tepid, evencooling. Since the fourth quarter of 2012, the land market has being remained uneven, and up and down of land price exists simultaneously in different cities. The land market in first-tier cities and core second-tier cities maintain continuous hot with both trading volume and price significantly going up. The “land kings” by both unit price and total price appeared one after another, which reached a new record. In many places, the phenomenon of “flour is more expensive than bread” appears which causes the rise of housing prices. This ran in the opposite direction to the price control targets at the beginning of 2013, and thus increased the risks in real estate development in first and second-tier cities. From the situation of national land purchase area, the first 8 months of 2013 fell by 9.1% year-on-year. Although the decline is narrowed (-16.2%) compared the same period of last year, the land market is still in short supply. Compared with the first-tier cities and the core second-tier cities where the land market is hot, the land market in third and fourth-tier cities are relatively cooling. “Land king” in first-tier cities and the so-called “Empty city” of third and fourth-tier cities co-exist. The abnormal land market differentiation of “short supply in first-tier cities and oversupply in third and fourth-tier cities” becomes more significant.
As predicted in the Green Book of Housing Market, regional differentiation will continue. The first-tier cities and core second-tier cities are in some extent short of land resources, which will cause the rise of price. The housing turnover of second and third-tier cites may continuously go up with relatively steady price. Some third and fourth-tier cities may experience a decreasing of both turnover and price.
According to the Green Book of Housing Market, it is recommended to add land supply in first-tier cities and core second-tier cities, especially for commercial residences, and at the time, reduce the land supply of the third and fourth-tier cities, and make appropriate land control objectives of corresponding cities to prevent the aggravation of regional differentiation. Due to the risk of overheating of rising in both volume and price that already appeared or may appear in the first-tier cities and core second-tier cities, appropriate land supply increasing is required and proper land control objectives shall be developed, and the regulatory responsibilities shall be defined clearly and administrative accountability shall be the strengthened. On the other hand, excess supply is indicated in the land market of third and fourth-tier cities as well as some second-tier cities, therefore, the land supply of such cities shall be reduced accordingly, in order to avoid the so-called "ghost town", "empty city". The phenomenon of "ghost town" and "empty city" is the extreme situation occurred under the atmosphere of “only land urbanization, not population urbanization”. Land supply shall be linked to industrial agglomeration, population migration, and public service layout and the land market development should be coordinated with the process of new urbanization. It is necessary to strictly control the newly added construction land, optimize land use spatial layout, fully consider the convergence of urban agglomerations and large/middle/small cities, so as to make the supply of land matching with the urbanization strategy, so as to prevent the phenomenon that the land urbanization is faster than population urbanization.