Author丨Li Sha
Editor丨Wang Feng
Source丨Visual China
On December 19, 2023, the Beijing Municipal Commission of Planning and Natural Resources issued the Notice on Clarifying Matters Concerning Land Prices Related to Commercial Residential Land Projects (hereinafter referred to as the "Notice"), which clarifies the land transfer prices by use, which is conducive to enterprises to calculate the development costs of land for different purposes and improve the accuracy of investment decisions.
The day after the issuance of the "Notice", two residential land auctions in Beijing were launched, located in Changping Zhuxinzhuang and Fangshan Guangyang City, with a total transfer area of 99,700 square meters and a total starting price of 5.47 billion yuan. Among them, the transportation, industry and commercial facilities of the Zhuxinzhuang plot have certain advantages, and the surrounding two plots were traded at the beginning of the year.
Since the beginning of this year, there have been some changes in the land auction policies in various places, such as the release of the list of land plots to be transferred, the shift of centralized land supply to multi-frequency and small amount of land supply, such as the cancellation of land price restrictions in many places, and the recovery price of land auctions will be obtained, and then by lowering the bidding deposit and other ways to lower the threshold for real estate enterprises to participate in the auction, so as to enhance the enthusiasm of real estate enterprises to participate in the auction. In addition, the structure of land supply in various places has also changed, and the supply of high-quality land has increased, driving the average floor price of transaction plots to rise.
However, judging from the land auctions from January to November 2023, the land supply and transactions in cities of different energy levels have decreased to varying degrees year-on-year. According to the data of the China Index, from January to November, the land launch area of 300 cities across the country decreased by 21.5% year-on-year, the transaction area decreased by 28% year-on-year, and the land transfer fee decreased by 21.7% year-on-year. Although the popularity of high-quality land plots in some hot cities has risen, the land market has not warmed up this year.
All localities continue to optimize the local auction policy
A few days ago, Beijing issued the "Notice" to further optimize the management of land supply. The "Notice" clarifies that for the project of residential land and public land transfer that has newly issued an announcement on the transfer, the starting price of residential use and public construction use will be clarified in the announcement (pre-application announcement), and the proportion of residential use and public construction use in the premium part of the land transaction price will be determined according to the proportion of the starting price of each use to the total starting price of the project.
At the same time, the transaction price of the land for residential use and public construction will be specified in the transfer contract, and the land price for the use of underground garage and storage will be specified in the supplementary agreement to the transfer contract.
The introduction of the "Notice" makes the land auction and land price more clear, which is more conducive to enterprises to calculate the cost of land development for different purposes according to the facts, and improve the accuracy of investment decisions.
On December 20, two residential land auctions in Beijing began, of which the Zhuxinzhuang plot in Changping included an F3 other multi-functional land. Zhang Kai, head of the land market research of the China Index Research Institute, told the 21st Century Business Herald reporter that F3 other types of multi-functional land are mixed land for public construction, and the transfer of Zhu Xinzhuang land is carried out in accordance with the requirements of the "Notice", but the relevant content was not clarified when it was listed before, and the land price for different purposes will be clarified when the transfer contract is signed.
Not only Beijing, but also many places have adjusted the rules for land auctions this year, among which the establishment of the announcement system for the list of plots to be transferred has a greater impact. At the beginning of this year, the Ministry of Natural Resources proposed to establish a system for the publication of the list of proposed transfers, and each time the detailed list corresponds to the proposed transfer time period of not less than 3 months in principle.
All localities have followed up and implemented this policy. From a practical point of view, after the introduction of the system, land transfer in various places is more flexible, the frequency of transfer increases, the rhythm of land supply is more normalized, and the centralized land supply in many places has shifted to a small number of times. In addition, this also gives real estate companies more time to conduct mapping and market research and judgment, and stabilize market confidence.
Another major change in the land auction policy this year is the abolition of the upper limit of land prices, and the highest price of land auctions will be rewarded. According to media reports, at the end of September, the Ministry of Natural Resources issued a document to provinces and cities, including a proposal to remove land price restrictions in land auctions. Subsequently, more and more key cities have abolished the upper limit of land price in the rules for the transfer of newly listed land plots.
According to incomplete statistics, Chengdu, Hefei, Jinan, Chongqing, Xiamen, Changsha, Nanjing, Fuzhou, Wuhan, Suzhou, Qingdao, Wuxi, Tianjin, Changchun, Hangzhou, Shenyang, Zhengzhou and other cities have implemented the policy. In addition, on November 21, Guangzhou made it clear in an announcement on the transfer of residential land in Huangpu District that "the highest price wins", and Guangzhou became the first first-tier city to cancel the upper limit of residential land price.
Meng Xinxin, an analyst at the China Index Research Institute, told the 21st Century Business Herald reporter that the future adjustment of land auction rules in cities that have canceled the upper limit of land prices is limited, and more involves reducing land prices, deferring the payment of transfer fees, and replacing deposits with bank guarantees.
At present, some cities have launched relevant policies. For example, on February 5, 2023, Wuhan made it clear in the "Policies and Measures on Stimulating the Vitality of Market Entities to Promote High-quality Economic Development" that it is necessary to strengthen the guarantee of land supply, reduce the bidding deposit, delay the payment of the land transfer fee, and determine the bidding deposit for newly transferred land at no less than 10% of the starting price, and allow banks to issue a letter of guarantee instead of the bidding deposit. In addition, the remaining land transfer price other than the bidding deposit is allowed to be paid within one year, and for special projects, it can be paid within two years.
Coincidentally, on October 16, 2023, Hangzhou proposed in the new property market policy that on the basis of the original payment of land bidding deposit as a performance guarantee for participating in land bidding, a bank guarantee on demand will be added as a performance guarantee for participating in land bidding, so as to alleviate the financial pressure of real estate enterprises.
In addition, there have also been changes in the land supply structure in various places, increasing the supply of high-quality land plots, and some cities have also written it into policy documents. In the above-mentioned new policy, Hangzhou proposed to optimize the supply structure of residential land, make land on demand, accurately supply land, and increase the supply of high-quality land plots with complete supporting facilities and convenient transportation.
Guan Rongxue, a senior analyst at Zhuge Data Research Center, told the 21st Century Business Herald reporter that this year, various localities have actively adjusted the land auction policy, or the main reason is that the local land market heat remains at a low level, and real estate companies lack confidence in acquiring land. She believes that there is still room for relaxation of the rules of land auctions in the future, or mainly to improve the enthusiasm of real estate enterprises to acquire land and increase the profit margins of real estate enterprises to explore or extend.
In the first 11 months, the land transfer fee of 300 cities fell by more than 2% year-on-year
On December 20, the Changping Zhu Xinzhuang plot in Beijing was highly concerned, which is about 800 meters away from the nearest subway station, and the surrounding industries and living facilities are rich, and at the beginning of this year, the two surrounding plots were sold by lottery. In this regard, Zhang Kai said that this is because the F3 public mixed land bundled with the plot is 77,000 square meters, which is too large, and the bidder of the plot is not allowed to divide and sell, but can only be transferred as a whole or self-sustained.
Individual plots may have special circumstances, but looking at the whole country, the land market in the first 11 months of this year is still difficult to be optimistic. According to the data of the China Index, from January to November, the land launch area of 300 cities was 565.33 million square meters, a year-on-year decrease of 21.5%, the land transaction area was 336.54 million square meters, a year-on-year decrease of 28%, and the land transfer fee was 2,160.8 billion yuan, a year-on-year decrease of 21.7%.
Meng Xinxin pointed out that since the beginning of this year, the real estate regulation and control policies have been continuously optimized, and the land auction rules have been continuously relaxed, but the activity of the new housing market in most cities is insufficient, and the overall performance of the land market is still low. On the whole, the shrinkage of land is still continuing, and the differentiation is intensifying, and only some cities or individual plots of land auction are more popular.
The supply and demand of land in cities of different energy levels are shrinking. According to the data of the above-mentioned institutions, from January to November, the area of land launched and the area of transactions in first-tier cities decreased by 14.9% and 29.9% year-on-year respectively, the area of land launched and the area of transactions in second-tier cities decreased by 18.6% and 26.8% year-on-year respectively, and the area of land launched and transacted in third- and fourth-tier cities decreased by 23.5% and 28.7% year-on-year respectively.
In terms of land transfer fees, from January to November, the land transfer fees in first-tier cities, second-tier cities and third- and fourth-tier cities were 464.1 billion yuan, 1,082.7 billion yuan and 614 billion yuan respectively, down 23.9%, 19.2% and 24.1% year-on-year respectively.
In this regard, Guan Rongxue believes that on the one hand, the slowdown in the pace of land pushing is mainly due to the lack of momentum in the real estate market, the slow recovery, and the main task of digesting inventory in various places to avoid aggravating the scale of land to be developed;
But there are exceptions, such as in the 22 centralized land supply cities, 1-11 months Changchun, Wuhan, Tianjin, Beijing, Jinan, Guangzhou land supply scale compared with the same period last year has increased to varying degrees, such as according to the above-mentioned agency data, 1-11 months Changchun launched land planning construction area of 5.88 million square meters, an increase of 431% year-on-year, Beijing launched land planning construction area of 5.88 million square meters, an increase of 12% year-on-year.
In terms of transactions, among the 22 cities, only Changchun, Tianjin and Beijing increased the transaction area, with 2.48 million square meters, 4.39 million square meters and 4.92 million square meters respectively, a year-on-year increase of 249%, 43% and 2% respectively. In terms of land transfer fees, only Changchun, Tianjin and Fuzhou increased to varying degrees, while the remaining 19 cities all declined, ranging from 1% to 59%.
Meng Xinxin said that in terms of local conditions, Tianjin and Changchun showed year-on-year growth in both ends of supply and demand due to base reasons, while Beijing was stable because of the stable sentiment of land auctions, and the overall supply and demand area of residential land was stable.
Looking at the land market in 22 cities, according to the data of the China Index, from January to November 2023, a total of 1,400 residential land projects were launched in 22 cities, with a planned construction area of 127.76 million square meters, a year-on-year decrease of 23%, and 1,018 transactions, with a planned construction area of 91.56 million square meters, a year-on-year decrease of 30%, and most cities continued to shrink.
In Meng Xinxin's view, in the case that the sales side has not yet warmed, the government pushes land and real estate companies are cautious, and when the low temperature situation of the land market reverses still depends on the recovery of the capital side and the sales side of real estate enterprises.
Guan Rongxue said that there are already local signs of improvement, such as the abolition of the upper limit of land prices, the relaxation of land auction rules in many places, releasing positive signals, in addition, the land auction rate has also continued to decline.
She said that the moderate relaxation of land auction rules and the increase in financial support for real estate will improve the financing of real estate enterprises. With the strengthening of policies and the gradual implementation of a number of favorable policies, the steady recovery of the land market next year may be worth looking forward to.
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