(Yicai Global) Jan. 12 -- Shenzhen, which has some of the fastest rising house prices in China, more than doubled its supply of new houses last year to an all-time high in order to meet ever increasing demand and to try to keep a lid on prices.

The economic powerhouse started construction on 12.36 million square meters of residential properties, a two-and-a-half-fold leap from 2019 and the most ever, according to data released by the city’s Housing and Construction Bureau yesterday.

“Housing supply will remain substantial in 2021, as many projects that started last year will come onto the market this year,” said Hua Hong, head of the research department at the Shenzhen Real Estate Intermediary Association.

Twenty housing and apartment projects with a total floor area of 949,000 square meters are expected to enter the market in the first quarter, the bureau said.

In the 40 years since Shenzhen was designated a Special Economic Zone, its population has swelled 42 times to 13.44 million. Yet only 22.6 percent of the city’s total available land is used for residential purposes. This is much lower than the national minimum standards of between 25 percent and 40 percent. The municipality plans to increase the proportion available to at least 25 percent as part of the country’s 14th Five-Year Plan (2021-2025).

Demand is skyrocketing and so are prices. Some 45,384 newly built residential properties were sold in the city last year, nearly 20 percent more than in 2019 and the most since 2016, the bureau said. House prices jumped 14.6 percent in 2020 from the year before. The average price of a pre-owned home was CNY87,957 (USD13,580) per square meter in December, much higher than in Beijing, Shanghai and Guangzhou.

The increase in supply is good news, but more needs to be done to enhance distribution to ensure buyers can find a property to purchase, said Yan Yuejin, head of research at Shanghai E-House Real Estate Research Institute.

Editor: Kim Taylor