ECONOMY

Guangzhou Slams Brakes on Apartment ‘Space Wars’ Amid Safety Concerns

Published: Jun. 11, 2025 6:30 a.m. GMT+8

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Residential buildings in Guangzhou on July 30, 2024. Photo: Bloomberg

Guangzhou has tightened approval rules for residential projects after developers exploited loopholes to boost “usable area ratio” beyond 100%, a trend that disrupted the secondary housing market with ultra-high space efficiency promotions.

Since Guangzhou revised its rules for calculating floor area ratios in November 2023, developers have increasingly converted fully-countable residential areas into partially-counted spaces like balconies and indoor gardens, effectively creating “free” space after inspections.

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Guangzhou tightened regulations on residential projects due to developers exploiting loopholes to inflate "usable area ratios" above 100%.
This practice, which included converting fully-countable areas into partially-counted spaces, led to safety concerns and disrupted the secondary housing market.
New rules, including stricter enforcement of existing regulations, aim to stabilize the market and prevent exaggerated efficiency promotions.

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Who’s Who

Poly Real Estate: Poly Real Estate's Poly Yanyu Tangyue project in Guangzhou significantly disrupted the housing market. Launched in May 2024, its apartments boasted an efficiency rate exceeding 100%, leading to dominant sales and a severe impact on nearby second-hand housing prices, which saw significant declines. This project exemplifies the aggressive marketing of inflated efficiency rates that prompted Guangzhou's recent regulatory tightening.

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What Happened When

November 2023：: Guangzhou revised its rules for calculating floor area ratios, leading developers to convert countable residential areas into partially-counted spaces like balconies and indoor gardens.

early 2024：: Cuicheng Garden prices were at 55,000 yuan per square meter before being impacted by the Poly project's release.

May 2024：: Poly Yanyu Tangyue project launched in Haizhu district with apartments exceeding 100% efficiency rate, priced at around 61,000 yuan per square meter.

December 2024：: Guangzhou authorities further restricted the practice of gifting non-proprietary floating gardens, capping balcony areas at 20% of apartment space.

February 2025：: Cuicheng Garden prices dropped to approximately 42,000 yuan per square meter, showing the impact of high-efficiency homes.

April 2025：: Guangzhou’s second-hand housing market stabilized after nearly two years of steady decline.

2025：: Guangzhou’s Planning and Natural Resources Bureau ordered intensified scrutiny of housing approvals, with post-completion reviews and stricter technical and fire safety oversight. Regulators issued new explicit rules regarding bay windows, structural columns, height restrictions, and fire-safety spacing.

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