China to Push For More Land Sales to Rein in Home Prices

China’s Ministry of Land and Resources announced this week that it will prioritise expansion of land available for housing development as the Xi administration continues to look for market driven means of controlling home prices.

The ministry made it clear that top priority will be making more land available in the country’s largest cities.

Speaking on a state-run radio station, Dong Zuoji, head of planning at the Ministry of Land and Resources, said, “We will increase land supply for property development in 2014, including in mega cities with populations of over five million. In fact, these cities are where the main increase will be.”

Despite slowdowns in the growth of home prices this month, deflating fears of a property bubble remains a goal for the central government.

Central Government Policy, Local Government Land

While setting a goal for releasing more land plots in large cities and creating more housing may appear to be a means to deflating a potential housing bubble, implementation will still face hurdles.

While the central government sets policy and targets, the actual sale of land is up to local governments who, because of their dependence on land sales for revenues, may be reluctant to flood the market with an excess of supply.

Land sales in major cities are also likely to be hindered by the difficulties of securing large plots for sale in areas that are already densely populated and built-up.