Hoarded land put under the spotlight again

10:02, August 20, 2010      

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The Ministry of Land and Resources (MLR) has made public a list of idle land in an effort to push developers to begin building, but analysts speculate it still will be difficult to implement the new plan.

  Based on investigation from March to July, a total of 2,815 pieces of land were found idle nationwide, with a total area of 113 million square meters, according to an MLR press conference Thursday.

  The 113 million square meters could provide housing to about 1 million households.

  Local governments' poor planning is one of the factors that resulted in about 60 percent of the idle lands, said Liao Yonglin, director of the department of land use management with the MLR.

  That means that about 40 percent of these idled lands were due to reasons including land hoarding. Real estate companies usually hold land without developing it in hopes of higher housing prices, which in return leads to reduced housing supplies and further drive up the market price.

  Over one-fifth of the land has no construction timetable.

  The MLR, however, did not provide a detailed list of property developers violating the rules.

  So far land use rights of 8 million square meters have been revoked, and 480 million yuan ($70.68 million) worth of fines and penalties had been imposed, Liao noted.

  The MLR urged its local branches to deal with the idle land before the end of October.

  The MLR's investigation shows the regulator's determination to fight against land hoarding, said Yin Bocheng, director of the Real Estate Research Center of Fudan University.

  A State Council decree in April stipulates that banks are not allowed to grant loans to property developers known to be hoarding land, and the securities regulator will not approve the developer's listing and financing on the stock market.

  Yin said, "however, it still takes time to find out whether the new rules can be strictly implemented."

  If local governments confiscate the land according to regulations, the move will hurt the developers and make the land harder to sell, which will not be good for the local government's revenue, Yin added.

  The MLR's rules on hoarded land management issued in 1999 and the State Council's regulation issued in 2009 clearly state that local governments are to take back land left idle for over two years without giving compensation to the developers.

Source: Global Times


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