Summary: According to the Outline, during the 13th Five-Year Plan period, the total amount of newly added construction land will be capped at 32.56 million mu, marking a direct 17% reduction despite persistently strong land demand. Meanwhile, Zhang Hongwei noted that converting real estate land into housing for shantytown redevelopment resettlement and public rental housing is more feasible compared to the challenges involved in shifting land use toward different purposes or adapting existing plans.

　　On April 14, a reporter from the 21st Century Business Herald learned from the Ministry of Land and Resources that the "Thirteenth Five-Year Plan Outline for Land and Resources" has been officially issued (hereinafter referred to as the "Outline").

　　According to data from the Ministry of Land and Resources, during the 12th Five-Year Plan period, the country allocated an additional 39.25 million mu of construction land. Nationally, urban construction land expanded by about 20% during this time—far exceeding the 11% increase in urban population over the same period. Meanwhile, GDP per unit of land remained at just 1/5 to 1/4 of that seen in Europe and North America.

　　According to the Outline, during the 13th Five-Year Plan period, the total amount of newly added construction land will be capped at 32.56 million mu, meaning that despite still-strong land demand during this period, the overall increase in construction land will drop sharply by 17%.

　　The "Outline" also clearly defines the direction and principles for real estate land use during the 13th Five-Year Plan period, proposing to moderately increase land supply in regions where housing supply and demand are tightly balanced, while reducing—or even halting—housing land supply altogether in cities with high property inventories.

　　Local fiscal pressures may increase.

　　As early as 2015, in response to the ongoing issue of housing inventory buildup, the Ministry of Land and Resources and the Ministry of Housing and Urban-Rural Development jointly issued the "Notice on Optimizing the Structure of Housing and Land Supply in 2015 to Promote Stable and Healthy Development of the Real Estate Market." According to the notice, cities and counties experiencing a significant oversupply of housing—or those with excessively large plots of residential land currently under construction—should reduce their residential land supply, potentially going as far as suspending planned allocations altogether.

　　According to an incomplete tally by reporters from the 21st Century Business Herald, more than ten provinces and cities—including Hainan, Liaoning, and Hunan—have already introduced measures to reduce or even temporarily halt approvals for residential land in areas with high inventory levels. Additionally, these regions have explicitly allowed real estate projects that haven’t yet broken ground to change their intended use in accordance with relevant regulations.

　　Hu Zhigang, Vice President of the China Real Estate Society, believes that reducing land supply is also an effective measure to ease the imbalance between supply and demand, helping to reduce housing inventory. The inclusion of reducing real estate land inventory in the National Land and Resources "13th Five-Year" Plan signifies that addressing housing stock will become a long-term policy direction spanning the entire five-year period.

　　"Beijing and other first-tier cities face a tight supply-demand balance, while megacities are required to strictly control the addition of new construction land, making it difficult to moderately expand land availability. For regions heavily reliant on land-based fiscal revenue, the widespread issue of inventory buildup persists—and reducing or even halting the supply of residential land could place significant pressure on local finances." According to Zhang Hongwei, Director at Tongce Research Institute (blog), the "Outline," as a guiding document, still leaves several challenging issues unresolved.

　　Chen Min, General Manager of Beijing Rongbang Ruiming, believes that reducing or even halting the supply of real estate land in areas with large inventories aligns with the direction of structural reform in land supply. However, this approach also requires complementary reforms in the fiscal and tax systems, as land sales still remain a key source of fiscal revenue for many regions.

　　"Land revenue is a crucial source of income for many regions, and temporarily pausing—or even reducing—the supply of land aligns with the current direction of real estate development. Additionally, this approach can help mitigate systemic financial risks at the local level. After all, when inventory levels are already high, even releasing new land parcels may still result in failed auctions or sluggish sales. However, in the long term, it remains essential to diversify local tax sources," a land-acquisition director from a major property developer—who asked not to be named—told a reporter from 21st Century Business Herald.

　 　On April 5, the Ministry of Finance released the "2015 National Land Transfer Revenue and Expenditure Report," revealing that in 2015, nationwide land transfer revenue collected into the national treasury totaled 3.365773 trillion yuan, a 21.6% year-on-year decline. Meanwhile, the total area of land transferred nationwide fell to 221,400 hectares, down 18.6% from the previous year. Notably, regional disparities were evident: for instance, Shenzhen saw its land transfer revenue rise by 36.9%, while Dalian experienced a sharp drop of 56.4%, and Ningbo recorded a decline of 54.1%.

　　The "2015 Study on the Contribution of the Real Estate Sector to Fiscal Revenue," released by E-House (Blog) Real Estate Research Institute, also reveals that total revenue from the "five real estate taxes" in 2015 amounted to approximately 1.33158 trillion yuan—down 3.6 percentage points from 2014. This marks the first time in nearly 15 years that the growth rate has turned negative.

　　Land conversion faces legal hurdles

　　Another policy direction highlighted in the "Outline" to address housing inventory is allowing land designated for real estate projects that haven’t yet broken ground to be repurposed—under relevant regulations—for constructing resettlement housing from urban shantytown redevelopment programs and public rental housing. This approach represents a slight shift from previous guidelines.

　　The previously mentioned joint notice issued by the Ministry of Land and Resources and the Ministry of Housing and Urban-Rural Development also signaled a loosening of land-use regulations. The notice stated that cities and counties experiencing a significant oversupply of real estate or where the scale of under-construction real estate land is excessively large could, depending on market conditions, encourage the repurposing of undeveloped real estate land by adjusting land use and planning parameters.

　　In addition to being converted into housing for relocation projects and public rental housing, the notice also clearly states that by adjusting land use and planning conditions, underdeveloped real estate sites can be redirected toward the development of emerging industries—such as those supported by the state—as well as sectors like elderly care, cultural industries, and sports-related projects, thereby fostering investment in these and other complementary industries.

　　Local governments in many regions have also introduced policies aimed at reducing inventory, specifically highlighting the potential of repurposing land to address structural housing stock issues. For instance, Hainan’s new real estate policy released in February explicitly encourages converting undeveloped residential plots into land designated for tourism properties, commercial developments, or other types of income-generating real estate—effectively shifting away from traditional residential development altogether.

　　Liaoning recently introduced a new policy focused on reducing housing inventory, which explicitly outlines strategies to redirect undeveloped real estate land toward more promising sectors. By adjusting land use and planning regulations, the province aims to encourage the transformation and repurposing of these sites—for development projects supporting emerging industries, the aging care sector, cultural industries, sports initiatives, and other nationally prioritized areas.

　　Zhang Hongwei also told a reporter from the 21st Century Business Herald that while allowing land-use conversions, there is still a lack of detailed operational guidelines. According to current land-use control regulations, any shift in land use or planning directly impacts land value—so the question remains: how will approvals be handled, and how will conflicting interests be balanced? Currently, the industry hasn’t heard of any actual cases where these measures have been successfully implemented.

　　Compared to the complex challenges involving interests tied to shifts in land use and planning for different purposes, Zhang Hongwei noted that converting real estate land into housing for shantytown redevelopment resettlement and public rental housing is more feasible.

　　Several officials from local land bureaus told reporters from the 21st Century Business Herald that, under the current Land Management Law, strict control over land use is mandatory. While local areas have significant demand for land-use conversions, practical implementation still faces obstacles posed by higher-level legislation.