Breaking News: Land Enters Retail Era!

Here is the translation of the provided text into English: Everyone is waiting for the news that first-tier cities will fully lift the restrictions on the real estate market, but unexpectedly, the land market has taken the lead in breaking big news.

Recently, the Leading Group for the Stable and Healthy Development of the Real Estate Market in Lishui City issued the "Further Optimization of Real Estate Market Regulation Measures".

The measures include: extending the housing subsidy until the end of 2024, promoting the exchange of old for new, launching low-density land plots, and allowing the construction of single-story low-rise residential buildings, among other measures.

Among them, a key clause is: "Appropriately relax the restrictions on floor area ratio (FAR), allowing the construction of single-story low-rise residential buildings under certain circumstances, and the non-street-facing parts of low-rise buildings can use solid walls not higher than 2 meters."

Subsequently, a 16-acre low-density plot in Bihua New City was unveiled, consisting of three blocks, A, B, and C, made up of six small residential plots with a FAR of 0.7-0.8.

Among them, Block A is further divided into four smaller plots: Plot A-1 is 865m², Plot A-2 is 818m², Plot A-3 is 989m², and Plot A-4 is 982m², with an estimated number of houses per plot being one.

There are 14 key points to this news: 1.

The extremely low FAR, only 0.7-0.8.

This means that these plots are essentially villa land.

2.

The land is divided into small plots for sale, each ranging from 800 to 1000 square meters.

The starting bid price is 2 to 3 million per acre.

This means that for these small plots, if they are auctioned individually, each plot would start at 3 to 4.5 million.

This implies that the cost of acquiring land has plummeted, and it is no longer limited to developers; an ordinary middle-class family now has the ability to acquire land.

3.

The removal of restrictions on land acquisition.

In terms of land purchase methods, individual owners can independently purchase land and build on it, or multiple owners can join forces to bid on a plot of land and build together.

There are no longer any conditions set for acquiring land; individuals, groups of individuals, are all eligible to acquire land.

4.

After the villas are built, each house will have a certificate and can be sold on the secondary market.

After completion, multiple owners can claim their houses and handle their own property certificates, with each property being independently owned and belonging to different owners.

Regardless of the purchase method, subsequent sales and transfers through the secondary market are supported.

This practice is very common abroad, but it is truly novel in China.

The impact of entering the retail era of the land market includes: 1.

The arrival of the DIY villa era.

Villa DIY has existed for a long time, but it was aimed at the super-rich class.

Some developers would communicate with the super-rich before acquiring land, saying they were going to acquire a plot, and it was a selected group of families with similar social status, asking if they wanted to participate.

If you participate, the designer will provide you with several options, and you can choose which one you like, and we will build it according to your preferences.

Therefore, many of the super-rich do not have a concept of how large their villas are, because they are not standardized products.

In the past, only the super-rich class, invited by developers, could enjoy this treatment.

Now, a few middle-class families can discuss and achieve DIY villas.

Of course, the difference from rural self-built houses is that it has a certificate and can be sold.

2.

The arrival of the land retail era.

Why did only the super-rich class have this treatment before?

Because the cost of acquiring land was too high, and there were too many restrictions.

Either developers did not have the strength to acquire land, or they did not have the strength to bring together super-rich people.

In the past, China's land market was still a wholesale market, and those who acquired land were basically major developers.

If ordinary companies wanted to acquire land to build dormitories for employees, they also had to first establish a real estate company and have various qualifications, etc.

We have also introduced many strict policies for developers to acquire land, such as the funds for acquiring land must be the developer's own funds, not bank loans, etc.

Now it's all gone, and individuals can buy land.

3.

Why is this happening?

Why is this situation occurring?

1.

Land finance is too hard to quit.

Previously, some people predicted that developers' transformation would not succeed because their work was too simple and all were huge profits.

As long as they got some departments, land, and banks sorted out, the rest was just waiting to collect money.

Want to transform and engage in manufacturing?

It's impossible to succeed because they don't have fine management capabilities, research and development capabilities, etc.

Industry development is the same, making money in real estate is too fast, the effect is also very high, and it's very prestigious, with wide roads and iconic buildings everywhere.

However, developing industries with high technological content such as manufacturing is too difficult, and it's not profitable to nitpick.

After looking around, it still has to rely on land finance.

2.

The land market, the game of passing from hand to hand can't be played anymore.

Since the real estate market was hit, private developers basically stopped acquiring land, and they were busy dealing with their own debts.

After all, acquiring land is for future development and can wait, but debts are about life and death at the moment.

Private real estate companies do not acquire land, but land finance cannot be quit, what to do?

It is required that state-owned enterprises play a role.

Therefore, in the past two years, those who have acquired land are basically local financing platforms and central state-owned enterprises.

Let's take a look, the news that a certain place has taken a land king is basically a few state-owned enterprises playing.

What's the problem?

State-owned enterprises taking land is a game of passing from hand to hand, subsidizing local finances with the money of state-owned enterprises.

Moreover, this is not a market approach at all.

After state-owned enterprises take land and build houses, they can't be sold.

State-owned enterprises take land at high prices, bank loans, and houses can't be sold, and naturally, there will be debt problems.

Didn't Oceanwide Real Estate go bankrupt?

So, through the medium of land, state-owned enterprise funds are passed to local places, and this game of passing from hand to hand can't be played anymore.

3.

The super-rich do not take over, there are still the middle class.

But this game has to continue, what to do?

We can only think of another way.

Land, before it was sold in large chunks, one piece was several hundred million, and those who took land were all developers, only a few wealthy individuals took land.

Now everyone is out of money, why not sell land in small pieces?

It's okay.

Before, when we bought cigarettes, when we had money, we could buy them in packs; when we were out of money?

We could buy them one by one.

So, land can also be sold in small pieces.

The super-rich class does not take over real estate, there are still the middle class.

A small piece of land, just right for building a big villa, the huge middle class, there will always be someone to take over.

Sun Hongbin does not take land, Wang Jianlin does not take land, but Xiao Wang and Xiao Li in the office can still take land.

4.

What can be expected?

1.

The land market, the era of retail is a big trend.

2.

Small developers may prosper again.

3.

Those who eat crabs first have risks, and policy uncertainty is too great.

If a certain place has pressure, then you may take the land, but you can't build a house, or you can't get a certificate after building a house, etc.

There are always more ways to sell land than difficulties.

Regarding difficulties, you never know where they will come from.