Guangzhou Offers Deferred Land Payments for Completed-Home Sales

The city has outlined a five-year plan to steadily promote this completed-home sales scheme, aiming for a transition to a 'what you see is what you get' approach for homebuyers. To encourage participation, developers in the pilot program will benefit from deferred land payments, potential increases in loan limits from commercial banks, and interest rate discounts. The local government will also provide public resource support and allow installment payments for land.

According to Li Yujia, chief researcher at Guangdong Housing Policy Research Center, this shift responds to increasing buyer demand for transparency and quality. The new model is expected to alter developers' business strategies, moving from high turnover to a more extended supply cycle. Guangzhou plans to initially test this model in areas with high new home supply and downward price pressure, offering preferential policies to participating developers.

China's traditional presale model allows developers to sell homes based on blueprints after obtaining government certification, which helps accelerate construction by raising funds. However, it carries risks for buyers, including unfinished properties due to developer misconduct or financial issues.

The '15th Five-Year Plan for Housing Development in Guangzhou (Draft for Comments)' also specifies optimizing housing supply to meet diverse demands, supporting specific groups like new talents and families, and implementing preferential tax measures. The city aims to digest existing housing inventory through various means, including acquiring properties for resettlement and encouraging their conversion to other uses. Furthermore, Guangzhou intends to strengthen its rental housing market and support professional rental enterprises.