China shrinks land supply

China has shrunk its planned land supply for residential apartments this year, the latest official data showed Tuesday, fueling market concerns that the land supply is still too limited to help curb rising housing prices especially in top-tier cities.

China will supply 150,800 hectares of land nationwide to build residential houses this year, about 1.5 times the average annual supply over the past five years, which is in accordance with the State Council's property market control policy rolled out in February, the Ministry of Land and Resources (MLR) said in a statement Tuesday.

But compared with last year, the figure is 5.3percent less.

The planned national land supply for residential houses was 159,300 hectares in 2012 and 218,000 hectares in 2011, according to previous data from the MLR.

Plots for affordable housing, renovated shanty houses and small and medium-sized commercial housing will account for 79.4 percent of the total land supply this year, according to the ministry. It also noted that cities affected by fast-rising housing prices should increase land supply for small apartments.

"The government has stressed the increase of land supply with the aim of stabilizing public expectations about housing prices, but actually this year's planned land supply for residential houses is lower than in either of the previous two years," Xie Yifeng, head of the Asia-Pacific Real Estate Association, told the Global Times Tuesday.

"But this year's plan has better supply structure than before as it stresses the supply for affordable housing and smaller apartments," Xie said.

In breakdown, this year's land supply in four top-tier cities - Beijing, Shanghai, Guangzhou and Shenzhen - will be 2.8 percent higher than last year, the MLR said.

Experts have expressed doubts as to whether the slight increase in land supply can help curb the overheated property market in cities like Beijing.

"There is a gap between land supply and demand in Beijing, and the limited land supply has boosted local land prices," Chen Guoqiang, deputy director of the China Real Estate Society, told the Global Times Tuesday.

On the other hand, "in some third- and fourth-tier cities where there is already a high inventory of residential housing, the land supply increase will only add pressure to the current stockpiles," Chen said.

The MLR has failed to fulfill its residential land supply plans over the past three years, and industry experts remain pessimistic about this year's situation.

"It is still difficult for the government to fulfill residential land supply plans this year, as property developers will be more cautious about acquiring land given curbed demand from homebuyers, tightened bank lending, and pressure to reduce housing stockpiles," Xie said.