Earlier this week, Bloomberg ran a story entitled “China Tightens Land Purchase Rules, Bans Villas.” Here’s a snippet:
China is requiring a down payment for land purchases equal to 50 percent of a plot’s price and prohibited the supply of land for villas as the government sought to increase affordable housing. …
The Land Ministry said in its statement that not less than 70 percent of new land supply should be used for affordable housing and smaller apartments, and that plots for villa construction is “strictly prohibited.”
Fearing an asset bubble about to burst, this is just one of the moves China is making in an effort to “rein in speculation and increase the amount of affordable housing.” One must to wonder what effect this will have on China’s “explosive” and “booming” golf course construction industry (well, those of us covering the development of golf in China must wonder). As I have mentioned before, much of China’s golf course growth is inextricably linked to the luxury villa market.
“It is all about selling vacation houses and having it full three to four months of the year,” one golf course architect explained to me last year in Hainan. “Three years ago, everyone you talked to was, ‘I want to build the best golf course in China!’ Now there are a lot more developers out there saying this golf course is an amenity to my project. It is not my project; it is a part of it. It is as important as the swimming pool. It is as important as the hotel. It just happens to take up a lot more space.”
So with villa construction seemingly “strictly prohibited,” what happens to all of these planned golf courses (which, I guess I should point out, are also technically prohibited)? Well, here’s what one golf course construction professional told me: “If golf courses can find a way around many other much more serious issues and keep going, then surely the name ‘villas’ is not going to stop golf.”
So, if a golf course can get around regulations by calling itself a “Ecotourism and Fitness Center,” what do you think they’ll start calling the villas? Green Leisure Harmonious Living Quarters? Other ideas?