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Guangzhou's land authority had attributed the recent housing price increase to rumors of a land shortage spread by some developers, a Guangzhou Daily report said.

 

“Guangzhou is not short of land and it will not be. People should stop following the rumors and avoid buying expensive houses blind-mindedly,” the newspaper quoted a spokesperson of the Guangzhou Municipal Land Resources and Housing Management Bureau as saying yesterday.

 

The average price of housing in Guangzhou jumped by 10.7 percent last year, according to the official figure. However, Real estate consultancy DTZ Debenham Tie Leung says that the average housing price jumped by 15 percent in the city last year. Such a big price rise was unusual for Guangzhou, where housing prices remained stable from 1996 to 2004.

 

The city’s hosing prices did not see a significant increase even between 2001 and 2004, when most the prices in most mainland cities shot up.

 

Some developers and housing agencies said last year’s price hike was caused by a land shortage. But the government spokesperson said the government sold about nearly 6.6 square kilometers of land — a record amount — to real estate developers in 2004.

 

“It takes about two to three years to complete a real estate project. Since plenty of land was sold in 2003 and 2004, a land shortage is impossible in 2005 and 2006,” said the spokesman, adding that the city sold on average 3.87 square kilometers of land to real estate developers annually from 1993 to 2003, more than the city’s requirement of 3 square kilometers per year.

 

The spokesperson said some real estate developers felt a land shortage because their land reserve — a lot of which was obtained at low prices before the government started to sell land through public bidding — was running out.

 

“They (the developers) just cannot get used to a smaller profit brought by the new land sales regulations,” said the spokesperson.

 

However, the government has promised to sell more land to real estate developers and take back idle land in 2006 in order to prevent housing prices from rising to an even higher level.

 

(Shenzhen Daily February 21, 2006)