INSUFFICIENT land supply, the rising cost of land and slow development of sales and leasing in used apartments have led to a massive housing price increase across China, says the China Real Estate Association.
According to the National Development and Reform Commission last week, housing prices in 70 large and medium-size cities jumped 6.3 percent in the second quarter from the same period a year earlier. The growth was led by Shenzhen, Beihai and Beijing, which each recorded growth of 14.3 percent, 12.5 percent and 9.5 percent.
In July, housing prices in the 70 major cities monitored by the commission surged an average 7.5 percent, the biggest gain in almost two years.
"Land supply still remained inadequate despite the fact that more land had been introduced to the market during the first half of this year," Zhu Zhongyi, deputy head of China Real Estate Association, told an industry forum held in Boao, Hainan Province, last week.
"In addition, some developers slowed down their development process which then made the situation even worse."
According to statistics released by the association, land supply in the country rose about 10 percent in the first six months of this year compared to same period a year ago. However, the increase was still insufficient to catch up with rapidly growing market demand, industry people said.
To make the situation worse, the ratio between land developed and land acquired was set at 68.4 percent in the January-June period, national statistics by the association showed.
The rising cost of acquiring land by developers also led to the increase of housing prices, the research said.
Land acquisition costs nationwide jumped 28.6 percent in the first six months of the year, mainly because of increasing relocation costs all around the country and the implementation of "Bidding, Listing and Auction" mechanism in public transfer of land.