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5-year plan heavy on new housing

SHANGHAI will increase residential supply significantly during the 13th Five-Year Plan (2016-2020) period to ensure stable and healthy development of the housing market, and at the same time still keep its property-tightening measures in place, according to the latest industry blueprint.

Over the next five years until 2020, about 1.7 million new housing units will be added to the local market, an increase of 60 percent from the previous five-year period, the city government announced yesterday on its official WeChat account.

Among them, around 450,000 units will be commodity houses which refer to new residential properties, excluding those built under the city’s affordable housing programs.

About 550,000 affordable homes will be built and the remaining 700,000 units will be for residential leasing purposes.

To facilitate the growth, a total of 5,500 hectares of residential parcels will be released to the local land market between 2016 and 2020, an increase of 20 percent from the 12th Five-Year Plan (2011-2015) period. Among them, about 2,000 hectares will be designated for commodity housing development, 1,700 hectares for rent-only homes and the rest 1,800 hectares for affordable housing development.

“It is a good attempt by the government to largely increase the supply of residential leasing units, which will provide a new option particularly for young people,” said Joe Zhou, head of research for JLL China.

“Compared with renting from individual owners, leasing homes from developers or leasing companies is certainly more attractive to tenants.”

Earlier this week, the local land authority already released two parcels — one in Zhangjiang of the Pudong New Area and the other in outlying Jiading District — designated solely for residential leasing, the first project of its kind ever allocated in the city to developers.

By 2020, a housing system under which sale and lease are of equal importance should be established in the city, with stable and moderate growth in the supply of commodity housing, significant increase in the supply of leasing units, as well as guaranteed supply of affordable housing, according to the 13th Five-Year Plan.

Supportive policies will also be introduced to encourage business expansion of home-leasing enterprises.

To further improve the living conditions of local residents, about 50 million square meters of old residential buildings across the city will undergo repair and renovation to improve their functions and safety during the five-year period through 2020, according to the plan.

Shanghai will also stick to its tightening policies to curb housing speculation over the coming few years as homes should be built for accommodation, not for speculation, purposes.

In the first half of this year, sales of both new and pre-occupied homes more than halved in the city from the same period a year ago, a result of strictly enforced cooling measures that mainly include home purchase restrictions and raised downpayment and interest rates.

By the end of the 12th Five-Year Plan, per capita living space of local residents rose to 18.1 square meters in Shanghai, the city government said.