50% down payment now required for land purchases

According to a message posted on its web site, the Ministry of Land and Resources will now require a down payment of 50% for land purchases, Bloomberg reported. The down payment must be paid within a month of signing the purchase contract. Bidders must also pay a 20% deposit on the minimum price of the land involved in land auctions. As the Chinese government battles speculation and skyrocketing housing prices, it considers a potential asset bubble in the housing market as a particularly serious threat. In a bid to increase the quantity of affordable housing, the government has banned the construction of villas and allocated more than 70% of new land supply to affordable housing and apartments. Any delay in housing projects must also be explained in writing to the land ministry, with companies in violation barred from land auctions for a year.