Land management has new policies! Is it really a "pause on land supply"? Official response →

On March 16, the Ministry of Natural Resources and the National Forestry and Grassland Administration jointly issued the “Notice on Further Improving Natural Resource Element Guarantee” (hereinafter referred to as the “Notice”). The Ministry held a press conference to introduce and interpret the document.

Notably, the most attention-grabbing points in the “Notice” are twofold:

First, to establish and improve a mechanism linking new construction land with the revitalization of existing land, with the principle that annual new urban and rural construction land should not exceed the area of revitalized stock land.

Second, priority should be given to ensuring land for major projects and public welfare development, and in principle, it should not be used for commercial real estate development.

Regarding these two points, a relevant official from the Ministry of Natural Resources explained:

1. The annual new construction land in each region should not exceed the area of revitalized stock land. Simply put, “you can only add one acre of new land if you revitalize one acre,” which prevents disorderly urban expansion and sprawling development, and promotes a shift from relying on new land to revitalizing existing space.

2. In principle, new construction land should not be used for commercial real estate development. This does not mean no land will be supplied for real estate; rather, it emphasizes the efficient and prioritized use of existing resources—“precision supply and quality supply.” Policies should be tailored to cities, controlling the pace and timing of land supply, prioritizing areas with advantageous locations and complete supporting facilities, to promote enterprises to “secure good land and build quality housing,” continuously improve urban functions, and enhance residents’ quality of life.

Industry insiders believe that the new land management regulations directly affect the supply and demand relationship in the real estate market and will have a positive impact on stabilizing the market. It is expected that the pace of stock land storage will accelerate, and local governments may increase urban renewal efforts, further improving the supply-demand balance in the real estate market and helping to stabilize it.

Overall Planning of Stock and Increment to Promote Connotative Development

On March 16, the Ministry of Natural Resources and the National Forestry and Grassland Administration jointly released the “Notice on Further Improving Natural Resource Element Guarantee,” which includes thirteen policy measures.

Among them, regarding the overall planning of stock and increment to promote connotative development, the “Notice” states that construction land that has been approved by the local government but remains unused can have its land approval revoked by the original approval authority, with the involved balance of land replacement indicators still valid. For provinces (autonomous regions, municipalities) that have achieved “one map” connectivity, a total control mechanism for construction land scale during the planning period will be implemented, with the provincial government coordinating the use of the “14th Five-Year Plan” new construction land indicators. Each province (region, city) should establish and improve a mechanism linking new construction land with the revitalization of stock land, with annual new urban and rural construction land not exceeding the revitalized stock land area.

The “Notice” requires that new construction land prioritize major project construction and public welfare development, and in principle, should not be used for commercial real estate development. For scattered lands involved in urban village renovation—such as corner plots, sandwich plots, and patchwork lands (generally not exceeding 10% of the total project area)—and for affordable housing, public facilities, business outlets, and retail commercial projects related to people’s livelihood, approval and supply of new land can be handled.

In response, Liu Yan, Director of the Land Use Regulation Department of the Ministry of Natural Resources, pointed out that implementing total volume control during the planning period for construction land shifts from the previous annual national plan and quota system to a more flexible, precise, and autonomous approach by provincial governments, promoting coordinated urban and regional development. Additionally, a mechanism linking stock and increment will be improved to accelerate the revitalization of stock land. New construction land will be prioritized for major infrastructure projects, new business formats, new kinetic energy industries, and public welfare projects, supporting urban renewal, urban village renovation, and real estate inventory reduction, preventing disorderly urban expansion and promoting high-quality urban development.

Further Improving Market Supply and Demand Relationship

Regarding how to coordinate stock and incremental construction land, Kong Weidong, Director of the Department of Land Development and Utilization, explained that: First, control increment with stock. Urban construction land includes both newly added land through expropriation and transfer, and stock land revitalized through old city renovation, inefficient land redevelopment, and reclaiming idle land. Both sources constitute the land supply for economic and social development. Coordinating supply from both stock and increment requires careful planning—excluding projects like energy, transportation, and water conservancy sites—each year’s new construction land should not exceed the revitalized stock land area. Simply put, “you can only add one acre if you revitalize one acre,” fostering a good synergy between stock and increment to prevent disorderly urban sprawl and promote a shift from dependence on new land to revitalizing existing space.

Second, optimize resource allocation. With a large population and limited land, land resource scarcity is a fundamental national condition that is difficult to change in the short term. Land factors should be allocated based on a “three-account” approach: considering market benefits, national development, and people’s livelihood. Limited new land should be prioritized for major infrastructure projects and public welfare development. On one hand, increasing land supply for key projects like energy, transportation, and water conservancy, and supporting the construction of modern industrial systems with new quality production factors; on the other hand, increasing support for livelihood projects such as urban village renovation and public service facilities. Meanwhile, land supply is a key factor for stable and healthy real estate market development, especially under the new circumstances of significant changes in market supply and demand.

Regarding the “Notice” that explicitly states new construction land should not be used for commercial real estate development in principle, Kong Weidong said this does not mean no land will be supplied for real estate; rather, it emphasizes the focus on efficient and prioritized use of stock resources, with policies tailored to cities, controlling the pace and timing of land supply, prioritizing areas with advantageous locations and complete supporting facilities, to promote enterprises to “secure good land and build quality housing,” continuously improve urban functions, and enhance residents’ quality of life. For example, some cities have recently transformed idle stock land into high-quality, livable, and business-friendly areas, becoming highly sought-after in the land market.

Third, better adapt to market demand. The relationship between proactive government actions and effective market mechanisms should be well managed, adhering to the principle of “supply based on demand.” The Ministry of Natural Resources will actively cooperate with the Ministry of Finance to guide local governments to issue over 540 billion yuan in special bonds mainly for stock land storage, aligning with high-quality development needs and creating “clean” and “excellent” land parcels. Additionally, efforts will be made to mobilize multiple stakeholders, support compatible land uses and complex spatial utilization, optimize planning adjustments and land use conversion rules, and strengthen public service facilities, creating high-quality spaces that better meet market and public needs.

According to the China Index Academy, the new land management regulations directly impact the supply and demand relationship in the real estate market and will positively influence market stability. It is expected that local governments will accelerate the storage of idle stock land and, through reasonable adjustments in land planning and land exchanges, better meet market land needs. After the implementation of these policies, more efforts in urban renewal are anticipated, with a focus on high-value land redevelopment. Meanwhile, the principle that new construction land should not be used for commercial real estate development will reduce land supply at the source, and the pace of revitalizing stock land will accelerate, both of which are conducive to inventory reduction, further improving the supply-demand relationship in the real estate market and helping to stabilize it.