Good info. Thanks for posting.We don't need to be worried about...

Good info. Thanks for posting.

We don't need to be worried about the leasehold. China is not unique in retaining government ownership of land. Singapore has a similar system with most land being government leasehold. Originally the terms were relatively short - 30, 40 & 60 years. However, since about the early 1970s most residential developments have been sold on 99 year leases, with recent up-market developments on 999 years. I believe commercial and industrial remains shorter term - either 40 or 60 years. At the end of a lease, the property reverts back to the state. I don't believe Singapore has renewed leases as a rule, except of course in the case of SOEs.

There are also many terms & conditions attached to leases. Any violation of these terms can lead to cancellation of the lease, giving the authorities a big stick, which they are not hesitant to wield. If, for example, someone is found to be engaging in organised criminal activity, and their apartment is deemed to be their base of operations, it is likely to be forfeit under the terms of the lease. This action will be completely independent of any court imposed penalties for their law-breaking. The lease system has also been used in the past for social engineering purposes, with percentages of Housing Development Board (HDB) apartments being reserved for minorities to counter discrimination and prevent ghettoization.

Singapore also keeps the older areas looking spic and span (in the government's capacity as landlord) by maintaining and periodically renovating the exteriors of government owned developments. There are no old, run-down HBD apartment blocks to be seen. In fact the new towns now resemble giant condo complexes, with landscaped gardens complete with shade trees, paths, seating, outdoor exercise areas, children's playgrounds etc.

China looked closely at Singapore's systems back in the 80s and 90s and largely adopted their approach.

VMT will need to be careful to comply with the terms of the lease. We should not expect any flexibility in the requirements for construction to commence before February 2024 and to be completed by February 2026 (we won't get away with building only a 'stage 1'). The nature of the development will also be defined in considerable detail, with controls on height, materials, energy efficiency, exterior colours etc, as well as end use. This is a 'top-down' approach to planning, with the primary mechanism of control being the terms of the lease.

NB: the above post is opinion only, and should not be regarded as financial advice.