Saturday, April 17, 2010

Beijing alters land-bidding rules to curb prices

IN a new step aimed at slowing property inflation, the Beijing authorities will attach less importance to the size of bids received at land auctions in the capital, Xinhua news agency reported yesterday.

Beijing is the first city to announce changes in its land-bidding rules. Record high land prices have helped to push up housing costs in major cities, including the capital, at a rate that has alarmed policymakers.

The State Council on Thursday ordered fresh measures, including higher down payments and mortgage rates, to rein in the red-hot property sector. Beijing officials will give a weighting of 25 per cent to the level of the bid, down from 50 per cent, Xinhua cited the local land and resources bureau as saying.

A developer’s ability to pay on time, how quickly it will complete construction, how much affordable housing it plans to build, and how it intends to cap prices of the finished homes would also weigh in the balance, it added.

Beijing plans to sell 2,500 hectares of land for residential use in 2010, up 65 per cent from last year. Half of that amount will be used to build housing subsidised by the government.

Xinhua said the city was introducing a range of other measures to curb land prices and boost the supply of residential property.

Source: Business Times, 17 Apr 2010

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