Economy

Idle land contributes to soaring house prices

By Wang Qian (China Daily)
Updated: 2010-08-20 09:22

BEIJING - A total of almost 11,000 hectares of land, equal to 13,750 football fields, have been left idle across China while a land shortage is blamed for soaring housing prices, the country's top land watchdog said on Thursday.

So far this year, the Ministry of Land and Resources (MLR) has detected about 2,208 cases of illegal land use covering 10,300 hectares across the country, including 2,044 cases of idle land.

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Idle land accounted for almost 90 percent of the total amount of illegal land in use at the end of May 2010, said Liao Yonglin, director of the Department of Land Use and Administration at the MLR.

The more land that stays idle, the higher land prices will be, said Chen Qian, an independent commentator on the real estate market. The continuing vicious cycle results in housing prices going up, he said.

At the end of May, local governments reported 2,815 cases of idle land, with 875 cases of land remaining unused for more than five years, according to ministry statistics.

"In order to control housing prices, we will release information on any real estate developer who tries to hoard land in any way to financial supervision and administration departments, making bank loans impossible for those developers," Liao said.

But more than 60 percent of the idle land cases are caused by local governments' improper administration in planning or demolition, Liao said.

Jilin Junzheng Real Estate Developing Company, for example, bought the rights to develop a 7,700-square-meter piece of land for commercial use in Longtan district, Jilin city in Jilin province, on July 27, 2007. Two years later, the land remains unused because the local government has not agreed that the land can be put to commercial use.

Construction on another piece of land in the Ningxia Hui autonomous region was delayed for more than a year after June 1, 2008, because the local urban planning department did not approve the project in time. The project finally started on July 12, 2009 after approval was received.

The government should think more about how to supply land on time, instead of delaying the administrative process, which contributes to idle land, said Yan Jinming, a professor of land management at Renmin University of China.

"If all idle land is placed under construction, it would be a great relief to the country's feverish housing market," Yan said.

Yan said the idle land could be used for at least 2.5 million 90-sq-m apartments, equal to nearly half the country's annual average housing supply.

The average land price for 105 monitored cities reached 2,756 yuan ($405) per square meter in 2010, with a year-on-year increase of more than 9 percent in the second quarter, according to the latest data from the China Urban Land Price Dynamic Monitor.