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China halts land supply for building luxury villas (06/01/06)


   China has prohibited the supply of land for building luxury villas as of May 31, Wang Shiyuan, vice minister of land and resources, announced.

    The land supply for low-density and large houses will also be strictly controlled, he said. The new policy constitutes part of the national effort to curb soaring housing prices.

    Wang said the ministry will comb luxury housing projects across the country to ensure the implementation of the new policy.

    However, critics have said the effect of the new policy is hard to gauge as key government departments are yet to agree on the definition of a "villa".

    It is common knowledge that some housing developers have in the past successfully dodged the government's restrictive policies on villa projects by referring to the word townhouse or other innovative names.

    Wang said land authorities will also increase the supply of land for the building of smaller and cheaper houses. Local governments will be required to publish their annual land supply plans, including the supply of land for building affordable houses.

    The State Council circular demands that local authorities must allocate 70 percent of the housing land to the building of cheaper, affordable homes.

    Land authorities will also step up their after-sale supervision so as to make sure that housing developers are properly using their land or building the right type of houses according to the land sale contracts, the vice minister said.




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