China's Land Watchdog to Smash Property Hoarders

China's land watchdog has ordered local authorities to be firm in tackling property hoarding in order to make sure more land will be used for affordable housing.

The order was signed only three days after Premier Wen Jiabao pledged to curb soaring housing prices in his annual report to the top legislature, and less than two months after the State Council released a guideline to control the market.

Wu Jia has the details.

The Chinese Ministry of Land and Resources says on its website that it is ordering local governments to give no less than 70 percent of new land supplies to affordable housing projects.

Although it doesn't include specific definition for "low-cost" housing, it limits the building of luxury departments and "strictly prohibits" all construction of villas.

Vice Minister Lu Xinshe says there will be no room for property hoarding.

"Property hoarders will get severe punishments with no exception, because their properties could have been used to meet more buyers' basic housing demands."

The new regulation requires bidders to make a 20-percent down payment on the land and pay more than half of the closing price within ten days of signing the contract. The remainder must be paid in one year.

Lu Xinshe says developers will also face severe consequences if they fail to obey the contract by either leaving the land unused or using it for other projects.

"The developers who leave the land unused over a year will be fined and will lose the whole thing with no redeeming it if over two years."

Hoarded land in China has reached some 100 million square meters, which accounts for nearly one-seventh of the new property on the market last year.

The land watchdog has dispatched 160 officials to supervise land use in 30 cities. The inspection will last through July.

According to numbers released by the National Statistics Bureau on Thursday, China's property prices rose by 10.7 percent in February over the same period last year, the first time the growth has reached double digits.

Wu Jia, CRI news.