The Property Puzzle

1. What have been the most significant real estate and land supply regulations and policies issued in the past year?

The Central Committee of the Communist Party of China and State Council, Opinions on Improving the Property Rights Protection System and Protecting Property Rights in Accordance with the Law released on November 4, 2016, proposed the study of legal arrangements for renewing land use rights, such as for residential construction, after they expire in order to encourage stable public expectations regarding long-term protection of citizens' property. They have been received as an important signal that the government will automatically renew individuals' use rights to residential land once their 70-year terms expire. The Ministry of Land and Resources, National Development and Reform Commission, Ministry of Finance, Et. Al., Opinions on Expanding the Scope of Use for Consideration of State-owned Land were issued on December 31, 2016. They specifically encourage land supply through grant and lease, as well as allocation, for projects that are able to use allocated land, such as those for energy, environmental protection, low-income housing projects, elderly care, education, culture, sports, and water, gas, and heat resource facilities. They also support municipal and county governments in providing land by using state-owned construction land use rights as capital contribution at value, or for acquiring an equity interest to invest in the construction of the above projects  alongside private capital.

Moreover, a series of regulations and policies were issued last year to restrict and govern financing by real estate development enterprises, substantially raising challenges in land acquisition, as well as in project development and construction in the ordinary housing sector in certain favored cities. These moves have had a significant impact on housing supply.