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recently, shanghai qingpu held a land promotion meeting, promoting 39 plots of land and 17 groups. among them, three plots of land have attracted special attention.

promotional materials show that the planned floor area ratio of plot d02-12 on the south side of dianshan lake avenue in zhujiajiao town, and plots 105-06 and 105-20 on the east side of zhuxi road in zhujiajiao town is only 0.8.

at the end of september last year, the ministry of natural resources issued a document suggesting that the restriction on the floor area ratio of suburban areas not to be less than 1.0 be cancelled. the signal released by qingpu district this time means that the ministry of natural resources' suggestion to "cancel the restriction on the floor area ratio of 1.0 in suburban areas" will be implemented in a first-tier city for the first time.

since the beginning of this year, the overall land market has remained flat, but the "low-density residential land" launched in some core cities has set off a small climax in land auctions and has been hotly sought after by developers. the premium rate of a low-density residential land in hangzhou is close to 60%. in the wuxi residential land market, low-density residential land has become a mainstream supply type.

the reason behind the popularity of low-density residential land is, on the one hand, the loosening of policies, and on the other hand, the market's recognition. in some second- and third-tier cities, after low-density real estate products were put on the market, there were hot-selling scenes such as "sold out in 10 minutes" and "more than 2,000 people signed up for the lottery".

core cities frequently push for low-density residential land

as early as 2003, the land supply of low-density villas was halted at the national level. subsequently, the restrictions on villas were continuously strengthened. in 2016, the state land and resources bureau issued the "notice of the ministry of housing and urban-rural development on matters concerning the approval of villa project construction", which clearly proposed to suspend villa approval.

shanghai, where every inch of land is valuable, stopped supplying residential land with a plot ratio below 1.0 as early as 2010. if the three plots of land with a plot ratio of 0.8 in qingpu district can be successfully sold, it also means that the "ban on villas" policy that has been implemented for 14 years has been relaxed.

an industry insider told reporters that the plot ratio requirement of 0.8 is enough to build a townhouse community. at the promotion meeting, relevant personnel from the qingpu district planning and natural resources bureau also stated that shanghai is currently studying the fourth-generation residential project.

in fact, first-tier cities have a large population and limited land, and the supply of low-density residential land is still in its infancy. in second- and third-tier cities, local governments have frequently launched low-density residential land since this year, which has been well received by the market. in some cities, low-density residential land has even become the mainstream supply in their land market.

in hangzhou, as long as a low-density plot is released in the main urban area, it will be snapped up by real estate developers. for example, in july this year, a low-density plot with a plot ratio of 1.2 in fengshou lake, hangzhou was sold to greentown, and the premium rate of 59% set a record for the highest premium rate for residential land transfer in hangzhou this year. not long after, hangzhou launched a low-density plot in baima lake, which was also "coveted" by greentown, jianfa, jinmao and other developers. after 42 rounds of bidding, greentown won it with a premium rate of nearly 40%, which is rare in today's land market.

in june this year, a low-density plot also became the focus of nanjing's land auction. the g11 plot in jianye district, near the hexi cbd, was originally planned to have a plot ratio of 1.8, but was later reduced to 1.01. as a result, it attracted competition from market-oriented real estate developers, with a comprehensive premium rate of more than 15% and a floor price of 43,888 yuan per square meter, becoming the second highest floor price plot in nanjing.

the market's recognition of low-density residential land has led nanjing to increase its investment. according to the nanjing resource planning department, more low-density plots will be launched in the future. among the 38 key plots this year, the gujiaying plot at the southern foot of zijin mountain in xuanwu district and the qinhuaihe international road plot in the southern new town of qinhuai district have the lowest plot ratio of 1.01, while the plot south of bali road in pukou district and the yuelu lake plot in lishui district have the lowest plot ratio of only 0.8.

in wuxi, low-density plots have become the mainstream of land supply. in june, wuxi announced 12 high-quality plots to be sold this year, of which 8 plots have a plot ratio of 1.2 or less, 4 plots have a plot ratio of less than 1.0, the lowest plot ratio is 0.8, and three-quarters have a plot ratio of no more than 1.2.

according to statistics from mingyuan real estate research institute, since the beginning of 2024, suzhou has sold a total of 13 plots of land, of which 6 had a floor area ratio of less than 1.05; among the 25 residential plots sold in hefei in the first eight months of this year, 5 had a floor area ratio less than 1.2, of which the two plots in xinzhan high-tech zone had the lowest floor area ratios, at 1.1 and 1.0 respectively. it has been 9 years since hefei last sold a plot with a floor area ratio of 1.0.

villa-like products are expected to increase in volume

the “villa restriction order” has been implemented for more than 20 years. what does the frequent launch of low-density plots mean for the market?

generally speaking, the floor area ratio refers to the ratio of the total building area to the land area of ​​a community. it is an important indicator that reflects and measures the intensity of the use of building land. for home buyers, the floor area ratio is one of the important factors that reflect the living comfort. if the floor area ratio is less than 0.5, a single-family villa can be built; if the floor area ratio is less than 0.7, a pure townhouse can be built; if the floor area ratio is less than 1.0, a townhouse and a villa can be built; and the floor area ratio of an 18-story high-rise residential building is generally between 1.8 and 2.5. the industry generally believes that a floor area ratio below 1.2 can be called low-density.

judging from the situation in various core cities, the floor area ratios of low-density plots currently launched in the main urban areas are generally close to 1.0, while the lowest floor area ratio for low-density plots in the far suburbs is only 0.8. this level of floor area ratio is still not enough to support the development of single-family villas and manor-style villas. only townhouses, duplex villas, and villas can be built. the development of low-density residential buildings is gradually liberalized under certain conditions.

starting from the second half of 2021, the national real estate market has entered a period of deep adjustment, and real estate developers have generally become less enthusiastic about acquiring land. the floor area ratios of low-density plots in many cities have also been reduced after adjustments. the originally high floor area ratios have led to a lack of demand for land, so they have to adapt to market conditions and lower the floor area ratios.

from the perspective of supply and demand in the real estate market, low-density products are indeed more popular in the market under the overall sluggish real estate market conditions.

take hangzhou as an example. this year, the property market in hangzhou has entered a downward period, but high-end improvement projects and low-density projects can still maintain a spot of high heat. when xiaying jinxiuli, a real estate project with houses and duplex villas as its main products, was first launched in june this year, 93 houses attracted more than 2,400 groups of people to register for the lottery, triggering the "maximum social security" requirement. when it was launched again at the end of august this year, 48 duplex villas attracted more than 800 groups of home buyers to sign up, once again triggering the social security ranking. the duplex villas with a total price of 20 million yuan were sold out in less than an hour.

in nanjing, jiangyuetang, a low-density large flat in yanziji, which was launched in june this year, is the first low-density plot put into the market in the yanziji section of nanjing in the past decade. the overall floor area ratio is 1.06. although the area of ​​each house is between 215 and 400 square meters and the average total price is 10 to 20 million yuan, more than 30 of the 40 houses put into the market in the first phase have been sold.

many local governments have also combined the promotion of low-density residential land with the fourth-generation housing, releasing low-volume-ratio land to the land market while introducing policies to encourage developers to build fourth-generation housing. such residential products not only have low building density and high greening rate, but also have the characteristics of "every household has a garden, every home has a courtyard, and the housing rate exceeds 100%". compared with traditional residential types, the comfort of new low-density fourth-generation housing has been greatly improved.

yancheng, jiangsu recently announced that 760 fourth-generation improved homes will be launched in the city this year. the first 31 units of the recently launched low-density duplex villa product fenghuanghuiliuyuan were all sold out through lottery within 10 minutes.

mingyuan real estate research institute believes that based on international experience, the development trend of high-end improved housing is the suburbanization of villas and the urbanization of large flats. it can be foreseen that with the adjustment of the land supply structure, the overall supply of villas will increase in the future, especially villa-like products (duplex villas, townhouses, etc.), which are expected to increase significantly. in addition, with the support of the fourth-generation residential design concept, duplex villas will have a stronger villa feel and provide a better living experience.

a regional manager of a leading real estate developer told reporters that the large-scale launch of this new type of low-density fourth-generation residential product will definitely have higher market recognition, but it will also have an impact on the existing new housing and second-hand housing markets, and the prices of the latter two may fall further.