Key facts
- Guangzhou is piloting a new land auction mechanism.
- Developers can defer part of their land payments for up to two years.
- The deferral is conditional on selling homes only after construction is completed.
- This initiative aims to shift away from the traditional presale model.
- The policy encourages the sale of completed properties.
- The goal is to stabilize the real estate market.
Guangzhou has introduced a new land auction pilot program intended to shift the real estate market away from the prevalent presale model towards the sale of completed homes. This initiative allows developers to defer a portion of their land payments for a period of up to two years. The condition for this deferral is that developers must commit to selling homes only after construction has been fully completed. The primary objective of this policy is to encourage the delivery of finished properties and thereby stabilize the real estate market. By incentivizing the completion of homes before they are sold, Guangzhou seeks to reduce risks for homebuyers and potentially improve market confidence. This move represents a significant departure from the long-standing practice of selling homes off-plan, which has been a common feature of China's property market for decades. The success of this pilot program could influence future land sale policies in other Chinese cities.