Shenzhen's new policy to restrict developer-led land run

The slowdown of growth in China's property market has prompted developers to lead a land run in first tier cities such as Shenzhen, Beijing and Shanghai, causing home prices to sky-rocket. Now China's Mayor of Shenzhen has announced plans to introduce tightening measures restricting home buying to a maximum of two residential properties for families of permanent residence and one residential property for others, to slow transactions over the short term and ensure prices are stabilised at a reasonable rate for the country's most expensive housing market. Shenzhen's rising population and robust economy have contributed to the recent 50% jump in prices, where the cost of an average new home was estimated at ¥44,823 per square metre in December 2015. However, experts highlight that lack of adequate housing supply and failure to force developers to cut prices means the only viable solution to Shenzhen's situation could be to increase housing stock, although such measures would take time to implement.

A worker walks past a propaganda slogan on a wall at a construction site in Beijing. Photo: Reuters