Hangzhou adjusts land transfer rules: the upper limit of premium rate is restored to 15%, and the requirements for existing house sales are cancelled

Hangzhou adjusts land transfer rules: the upper limit of premium rate is restored to 15%, and the requirements for existing house sales are cancelled

Recently, the Hangzhou Municipal Planning and Natural Resources Bureau issued new regulations, which made major adjustments to the land transfer rules. This adjustment mainly includesRestore land premium rate limit to 15%,as well asCancel the sales requirements for existing houses. This policy change is regarded as an important measure for Hangzhou to respond to the current real estate market situation, aiming to stabilize land market expectations and promote the healthy development of the real estate industry.

1. Main contents of policy adjustments

1.The premium rate cap is restored to 15%: Previously, the upper limit of the land premium rate in Hangzhou was set to 10%, and the adjustment was restored to 15%, which means that real estate companies can withstand higher premium space when bidding for land.

2.Cancel the sales requirements for existing houses: In the past, some land plots in Hangzhou required real estate companies to sell in the form of existing houses. The new regulations lifted this restriction, and real estate companies could choose their own pre-sales or existing house sales models.

3.Other supporting measures: The new regulations also optimize the land transfer fee payment cycle and adjust the bidding margin ratio to further reduce the financial pressure of real estate companies.

2. Analysis of policy adjustment background

The background of this adjustment is the recent weak performance of Hangzhou's land market. According to statistics, from January to September 2023, the amount of land transfer in Hangzhou fell by about 20% year-on-year, and the rate of unsold auctions increased. The following are some data on the land market in Hangzhou in the past 10 days:

From the data, it can be seen that the popularity of the land market in Hangzhou has declined, and some plots have even failed to sell. The policy adjustment is intended to boost market confidence and attract more real estate companies to participate in the auction.

3. Market reactions and expert opinions

1.Real estate companies respond positively: Many real estate companies said that the new regulations lower the threshold for land acquisition, especially the cancellation of existing housing sales requirements, which will significantly reduce the capital occupation cycle and help accelerate project turnover.

2.Expert interpretation: Real estate industry analysts believe that Hangzhou's adjustment is an implementation of the central government's "policy based on cities" requirements, and it is expected that other hot cities may follow up on similar policies in the future.

3.Homebuyers worry: Some home buyers expressed concerns about the cancellation of existing home sales requirements, believing that the risk of delivery of pre-sales houses may increase. In response, the Hangzhou Municipal Housing and Urban-Rural Development Bureau responded that it will strengthen the supervision of pre-sale funds to ensure that the property is delivered on time.

4. Future prospects

This policy adjustment is expected to boost the activity of the land market in Hangzhou in the short term, but the long-term effect still needs to be observed. Here are the possible impact directions:

1.The land market recovers: The increase in the premium rate upper limit may attract more real estate companies to participate in the auction, and the failure rate is expected to decline.

2.House price trend differentiation: Competition in core area plots may be more intense, while suburban plots may still be mainly sold at the lowest price.

3.Industry reshuffle accelerates: Leading real estate companies with strong financial strength will have more advantages, and it may be further increased by the difficulty of small and medium-sized real estate companies to acquire land.

Overall, the adjustment of the land transfer rules in Hangzhou this time is an important measure to stabilize the market and promote development, and subsequent market performance is worthy of continuous attention.