On September 26, the State Council issued the Notice on Intensive Land Use (the Notice) specifying relatively strict charging standards for idle land for the first time. Under the Notice, if the idle land has accumulated over two years, the relevant department will reclaim it for free or reassign it for use; if the idle land has accumulated for more than one year but for less than two years, the relevant department should collect fees for idle land on the basis of 20 percent of the price paid for the land. Furthermore, the Ministry of Land and Resources will collect added value fees for idle land.

 

An expert on real estate believes that land reserves have been at normal levels for real estate developers when the price of land has continuously increased, but that land reserves on a large scale inevitably lead to idle land. Thanks to the low cost of idle land, many developers are still expecting the price of land to appreciate. Several years ago a number of developers bought a quantity of land for a low price, but did not have enough money for new construction, and so the land was left idle. Other developers bought land when the price was too high, and because of high construction costs will have to wait for a better market.

 

Another expert states that once the cost of land reserves increases, the quantity of land reserves will decrease, and at that time developers will speed up the construction process.

 

(Source: The Tengxun Net)