Official Notice Strictly Controls New Construction Land for Real Estate Development: What Impact on Residential and Commercial Land?

[Caixin] Over the past four years, the real estate market has been deeply involved in a correction cycle, with supply and demand reversing. To optimize the supply side, regulatory authorities have issued strict controls on the incremental supply of local construction land.

Recently, the Ministry of Natural Resources and other departments jointly issued the “Notice on Further Improving Natural Resource Element Guarantee” (hereinafter referred to as the “Notice”). This “Notice” requires natural resources and forestry departments at all levels to proactively coordinate with relevant local departments regarding the spatial needs of key projects during the 14th Five-Year Plan, and to incorporate these into the local natural resources management and land space planning “One Map” (hereinafter referred to as “One Map”).

The “Notice” also proposes that during the 14th Five-Year Plan period, a total control mechanism for the scale of construction land be implemented for provinces (autonomous regions, municipalities) that achieve “One Map” connectivity, with provincial governments coordinating the use of new construction land indicators. Each province (autonomous region, municipality) should establish and improve a mechanism linking the activation of existing construction land with new construction land, ensuring that the annual increase in urban and rural construction land does not exceed the activated stock land area; priority should be given to major projects and public welfare development when allocating new construction land, and it should generally not be used for commercial real estate development.