Land hoarding hits lower-tier cities

Industry insiders say, with major cities reclaiming idle land from property developers, many harboring intentions of hoarding are turning to lower tier locations to stock up on resources.

One reason is that most people pay very little attention to such areas. Some developers believe regulators won't have enough energy to check out what's taking place in smaller cities. Meanwhile, many local governments also rely on land sales as their major source of income. This is another reason why those areas are reluctant to repossess previously sold land. Analysts add that what's happening in less populated cities is unhealthy for long term economic growth.

Real estate lawyer Qin Bing said, "Some Tier Two and Tier Three cities are not out of land resources at the moment. Local governments there are eager to sell their land to developers. They fear that if they take back too many of those previously sold plots, no one will ever go there for property project developments again."

Gu Yunchang, vice president of China Real Estate Research Association, said, "Developers stocking up on land resources have been seen everywhere around the country. Everybody knows that land resources are getting scarcer and scarcer. The more land the developers can stock up, the more profits they can make. These irregularities have to be dealt with seriously. We should rely on the government, and all of society, to improve the supply and demand relationship in the market."