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| Industrial Estate Prices Set to Rise |
July 9，2007 |
| In its newly released Circular of the State Council on Relevant Issues on Further Intensifying Land Control, China promulgated new policies to tighten its macro control on land use, which might cause a 50% increase in land prices. Sun Wensheng, Minister of Land and Resources, says this increase will be “bearable”. The new policies will augment all costs in land use. Gan Zangchun, Chief of the Policy and Regulation Bureau at the MLR, says, “The new policy, when implemented, will double land compensations, double land compensation fees for new construction land, triple city and town land-use taxes and increase farmland occupancy taxes.” “According to our estimate,” Gan says, “the overall land-use prices will rise by 33% to 50%, and may vary with different types of land use. Land prices for real estates will remain largely stable, with certain fluctuations in minor cities; transfer prices for industrial land use will increase by 40% to 60%, and reach the standard level.” Currently, land use rights for real estates are mainly granted through bidding and auction, in which prices are determined by the market. Because the final prices are often way higher than costs, the rising costs of land use will not cast great influence on land prices. “It is another case for industrial land use, though. Currently, the threshold transfer prices for industrial land use are set at 70% of the standard prices. In reality, however, local governments often offer even lower price in order to attract investment. Thus this new policy will substantially push up land prices for industrial use.” In future, the Ministry of Land and Resources will prescribe the lowest allowed prices for industrial land use all across the country, which shall not fall below the costs of land acquisition, preliminary development and relevant fees combined. Prices for industrial land use are set to rise. http://www.sczy.gov.cn/2007/7-9/10153961473.html |
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