During a press conference at the State Council Information Office on October 17, Liu Guohong, the Vice Minister of China’s Ministry of Natural Resources, revealed initiatives aimed at revitalizing existing land resources. He stated that the ministry will collaborate with relevant departments to explore the establishment of a special loan program for purchasing existing land, which would serve as a supplement to special bonds.
Liu highlighted that when it comes to controlling the supply of new residential land, the ministry will guide local governments to manage the issuance of new commercial residential land carefully. In cities where the absorption period is excessively long, the supply will be halted, while for cities with prolonged absorption periods, the principle of “reviving as much as possible and supplying as much as revived” will be implemented.
On October 12, the Ministry of Finance announced that special bonds could be used for land reserves. Liu noted that priority will be given to repurchasing residential and commercial land that companies are unable or unwilling to develop and which has not yet commenced construction, ensuring a match with special bonds and other funding. The plan includes collaborating with relevant departments to establish a special loan program for purchasing existing land, supported by the People’s Bank of China through special re-lending. He emphasized that for recovered land that will be offered again for real estate use, there will be strict controls. Only in cases of genuine market demand will conditions be optimized and distribution be precise, all while keeping within a specified proportion of the total land acquired.
Liu stated that the goal of retrieving and revitalizing existing land is threefold: first, to reduce the total amount of land available in the market, enhancing the land reserve’s role as a “water reservoir” to stabilize market expectations; second, to increase liquidity to assist real estate companies in securing funds to ensure housing deliveries; and third, to create “net” or “premium” land that not only addresses deficiencies in public service facilities and improves living conditions but also frees up space for supporting the development of the real economy and promoting effective investment.
Additionally, Liu outlined two pathways in the policy measures for revitalizing existing land. The first is to encourage companies to optimize their development efforts. For firms that are willing and where there is market demand, measures will include phased certification, deferred payment of land transfer fees, and reasonable exemptions from contractual liabilities to alleviate financial stress. The second pathway focuses on promoting market circulation and transfer. For companies unable to develop, local authorities will be guided to establish trading platforms, support pre-registration and “encumbered transfers,” and facilitate judicial disposals and cooperative developments to invigorate market activity.
