Beijing City Government Quickens Pace of Affordable Housing Rollout

(Beijing) — The Beijing Urban Planning and Land Resources Commission is offering five new land parcels for auction, pushing the total amount of land put up for developers in the first six months of this year greater than that in all of 2016.

The capital’s land commission has been making affordable housing for lower-income people — so-called economy housing — a priority.

So far this year, economy housing accounts for 30% of the total 2.96 million square meters (32.1 million square feet) planned for residential use in Beijing. That is double that of such housing in all of 2016, Centaline Property statistics show.

The latest numbers come as the Beijing municipal government has been adding restrictions on homebuying to try to combat voracious investors who are blamed in large part for soaring home prices, which are making homes unaffordable for many Beijing residents.

Another way the municipal government is trying to tackle rising prices is by requiring developers that purchase land parcels at auction to agree to devote a portion of sales to qualified lower-income buyers. The discount such buyers get can be up to 30% lower than the market price.

Local buyers without a property under their names can apply. Non-Beijing residents must show proof they have paid taxes and social security for five consecutive years. Buyers can't sell within five years of the initial purchase.

The combined areas for all residential housing purpose — for both normal residential housing and economy housing — also rose. By June, it amounted to 2.23 million square meters, three times more than the volume in 2016. Meanwhile, land sales in Beijing over the first six months amounted to 100 billion yuan ($14.7 billion), up by 179% from the same period last year.

The total transaction for land sales in 2017 is expected to surpass 200 billion yuan, according to data from Centaline Property.

The land resources in the Chinese capital are still hotly sought-after by real estate developers. Guo Yi, marketing director at real estate service Yahao, told Caixin that the rush of available land may bring some short-term relief to the city’s thirst for property.

Contact reporter Pan Che (chepan@caixin.com)