The second batch of centralized land supply in Shanghai is here: a substantial increase in rental and resettlement housing supply bidding rules have new changes

2021-09-15: [Original Article Link].

This round of land supply has been tilted in terms of leased land, Resurrection Housing and Urban Village Reconstruction land. In terms of regional distribution, the five new cities are still the main supply force, including 5 in Lingang and 4 in Qingpu. In terms of price, the second batch and the first batch of land in the same area are basically the same; The highest price is generally limited to the starting price of 110%. In terms of bidding rules, Shanghai requires land purchase funds for its own funds, and adds the concept of "random value" in the bidding process, so that real estate companies have a certain degree of randomness, increased the fairness of land in the written quotation process to implement the policy orientation of stable land prices. On the evening of September 13, the Shanghai Land Market website announced the second batch of centralized residential land supply information this year. This centralized land co-transfer 48 plots over 27 of residential land, total assignment covers an area of 2.5159 million square meters, start the transfer price of about 57.4 billion yuan. According to industry sources, the transfer time is 10 months, and the specific date is to be determined. According to the announcement, 27 residential land is distributed in 12 areas, including Lingang, Qingpu, Yangpu, Jiading, Pudongxin, Songjiang, Minhang, Chongming, Fengxian, Baoshan, Xuhui and Jinshan, Hongkou, there is no supply in the four districts of Huangpu, Jing'an and Putuo. From the perspective of regional distribution, the five new cities are still the main supply force, which echoes the plans of the five new cities mentioned at the beginning of the year, including 5 in Lingang and 4 in Qingpu. In terms of price, second batch with the first batch of regional land prices basically flat, only 3 plots of the government-guided prices more than 100,000 yuan, respectively) of Xuhui district in Shanghai Caohejing, Xuhui district health streets, Yangpu District Jiangpu community. Linkage price was the highest in Xuhui district Caohejing Street plot is 114,000 yuan/square meters. Premises linkage lowest price of Jinshan area feng jing zhen for 25,200 yuan/square meters. Compared with the previously released information, Shanghai's centralized land supply has been tilted in terms of leased land, resetlement Housing and Urban Village Reconstruction land. On August 13, the General Office of the Shanghai Municipal People's Government issued the "14th Five-Year Plan for Shanghai Housing Development." The plan points out that with the goal of living and living, we will continue to improve the housing system of multi-subject supply, multi-channel security, and rent and purchase, build a solid bottom line for housing and people's livelihood security, and strengthen the precise supply and system supply of housing, service supply and quality supply to further meet the multi-level, functional and quality residential needs. On August 13, the official website of the Shanghai Land Market announced that the second batch of centralized land transfer announcements originally planned to be released in the second week of August (August 9-August 13) was postponed to September. In the second round of land supply information released earlier, a total of 23 plots were planned to be sold, of which 15 were pure residential land and 7 were commercial or residential land, 1 more for leasing and commercial and residential mixed land total land area of about 1.49 million square meters. Regardless of the number of plots or land area, the proportion of leased land, resettlement housing and urban village reconstruction land in this round of land supply has increased significantly. Announcement shows that this round of land are included in the collection of resettlement housing block 14, or by transfer area of 686,400 square meters, with a rental housing 7 cases, transfer area of 151,200 square meters; The reconstruction of village in Block 2, or by transfer area of 46,800 square meters. Compared with the first round of centralized land supply, the bidding rules for this land transfer are also different. The policy is clear, the second batch of Centralized Announcement of residential land bidding rules, will add a concept of random value. In other words, during the written quotation stage, if the bidder offers the same, a random value will automatically be generated. This random value will be included in the calculation of the average price. According to past rules, each bidder obtains land through a written offer that is closest to the average. However, similar policies have some flaws. For example, some real estate companies have figured out the size of this average, so that the first real estate companies that submitted close to the average value can basically get the land. Now that the random value is added, it is meaningless to guess, and there is a certain degree of randomness in taking the land, which increases the fairness of the written quotation process. It is worth noting that in accordance with the relevant requirements of the long-term mechanism for the stable and healthy development of the real estate market, Shanghai clearly limits the source of transaction funds (that is, land purchase funds) of bidding entities. The announcement requires that the bidder (I. E., the applicant or the bidder or the bidder) shall not illegally provide loans, on-lending, guarantees or other related financing facilities, etc, land purchase funds shall not directly or indirectly use all kinds of financing funds of financial institutions, land purchase funds shall not use loans or Advance payments by related enterprises upstream and downstream of the real estate industry chain, and land purchase funds shall not use loans from other natural persons, legal persons or unincorporated organizations, land purchase funds shall not be used for financing of non-real estate enterprises controlled by participating in bidding enterprises. Secondly, the source of the transaction funds of the bidding subject (including bidding or bid margin, deposit and subsequent land transfer price) should be its own funds in accordance with China's laws, regulations and policies, the use of funds, including but not limited to bank loans, trust funds, capital market financing, capital management plan allocation, insurance funds and other sources that violate the relevant provisions of the State to pay land bidding or bid deposits, deposit and subsequent land transfer price. In addition, Shanghai requires that the various sources of funds declared by the bidding subject for land parcel transactions shall not be completely or partially duplicated with other sources of funds for transactions that have been announced; nor can it be completely or partially duplicated with the source of transaction funds declared by other bidders and winning bidders. The transfer documents show that the bidder's quotation during the listing period and on-site bidding shall not exceed the amount of its own funds declared, otherwise the quotation is invalid. The self-owned funds declared by the bidding entity shall be sealed up and supervised by the supervisory bank through the signing of the "Commercial Housing Land Transaction Funds Bank Supervision Agreement, ensure that their own funds will not be diverted for other purposes during the regulatory period, otherwise it will be deemed that the bidding subject provides false documents. Yan Yuejin, research director of the think tank Center of the E-House Research Institute, said that the new Shanghai local auction rules, in addition to the adjustment of bidding rules, also formed many new constraints, especially in the constraints on housing enterprises to take land funds. From the current policy control point of view, it is unlikely that real estate enterprises will use high leverage to obtain land, and the qualifications of real estate enterprises will face more stringent review, naturally, it has promoted the local standards of real estate enterprises, and further promoted the stability of the current Shanghai land auction market, and implemented the policy orientation of stabilizing land prices.

Note: This is auto-translated version of an article meant for Chinese audience. A mature and nuanced reading is suggested.