Shenzhen to auction first land lot only for rental homes

2017-10-13 01:06:16 GMT2017-10-13 09:06:16(Beijing Time) Agencies

SHENZHEN’S land and housing transaction center will auction a parcel of land in Minzhi, Longhua District, next month, for rental housing projects only.

This is the first time for the local authorities to put up at auction a piece of land that can be developed only for leasing instead of sale.

The 20,042-square-meter land lot can be developed for commercial and residential properties, as well as other auxiliary facilities with a total floor space of 90,180 square meters. The land use rights will last 70 years.

After the projects are completed, employees working in Longhua will be prioritized in contracting for the apartments with leasing contracts of up to 20 years. The apartments cannot be subcontracted.

The land and housing authority has capped the price limit at 1.01 billion yuan (US$148 million) for bidders. The starting price for bidding is 777 million yuan. If the offerings of the bidders exceed the 1.01 billion yuan limit, the bidders who plan to build more apartments for professionals will win the auction.

According to the center, 27,060 square meters, or 30 percent of the floor space, will be allocated for apartments for professionals. The apartments will be managed by Shenzhen Talent Housing Group.

“This auction shows the government’s clear and positive attitude toward cultivating the property leasing market,” Song Ding, director of Tourism and Property Research Center of Chinese Development Institute, was quoted as saying in a report by the Southern Metropolis Daily on Thursday.

Apartment leasing isn’t as profitable as apartment sales. The land auction mode indicates that future property market changes will start from the control of land development costs, according to Song.

“This will force property developers to change their development pattern and learn to accept it, otherwise they will have no chance to enter the property market,” said Song.

In Song’s opinion, the government made appropriate concessions in land price for the auction, while the developers need to control their costs in property development. These will be helpful in controlling housing prices in the city.

Shenzhen has been listed as one of the first batch of 12 cities by the Housing and Urban-Rural Development Ministry to pilot housing leasing programs.

These cities will pilot multiple-channel housing offerings for residents who don’t buy homes, including university graduates, migrants and relocated staff.

Since the end of last year, Shanghai, Guangzhou, Hangzhou and Beijing have started land auctions for self-owned, non-tradeable residential apartments.

Shenzhen Daily

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