Notice on Further Strengthening the Support of Natural Resource Elements (Natural Resources Development [Year 2026] No. 38)

Recently, the Ministry of Natural Resources and the National Forestry and Grassland Administration jointly issued the "Notice on Further Strengthening the Support of Natural Resource Elements" (Natural Resources Development [Year] No. 2026), hereinafter referred to as the "Notice." The Notice introduces new regulations regarding the supply of newly added construction land and urban renewal land use, attracting widespread attention from the market.

New Land for Construction: Prioritize Livelihood Needs, Strictly Control Commercial Housing Development

The "Notice" clarifies that newly added construction land shall be prioritized for major projects and public welfare initiatives, and in principle shall not be used for commercial real estate development. Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, explained that "newly added construction land" has a strict legal definition: it refers specifically to farmland or unused land being converted for construction use for the first time—essentially turning farmland or wasteland into urban land—not the market's understanding of "land newly released for sale."

The China Index Academy analysis indicates that this regulation imposes rigid constraints on real estate land use, aligning closely with the current strategy of "controlling new supply, reducing inventory, and optimizing allocation." This is expected to improve the balance between supply and demand in the real estate market. Li Yujia further noted that such land is typically located on the urban periphery, where new housing inventory pressure is highest. Restricting its use for commercial housing development will help the industry navigate through the inventory challenge.

Urban Renewal: Policy Breakthrough for Small-Scale Land Patches

The Notice marks a significant breakthrough in urban village renovation: for scattered plots such as corner lots, enclaved parcels, and isolated strips (with an area generally not exceeding 10% of the total project area), new land approval and allocation may be granted when used for people's livelihood purposes including affordable housing, public utility outlets, and retail commercial spaces.

The China Index Academy believes this policy further relaxes approval restrictions on fragmented land use, addressing the challenge of developing scattered plots in urban renewal. It offers tangible benefits for城中村 renovation and signals a strategic shift toward allocating land resources to affordable housing and public amenities.

Revitalize Existing Assets: Move Beyond "Sprawl" Expansion

Restricting new land use for real estate development requires regions to accelerate the revitalization of existing inventory. According to CRIC data, 313 cities nationwide have released lists of residential land in stock, with broad inventory reaching 3.2 times the narrow inventory level. The broad absorption period generally exceeds 5 years.

Cui Ji, Executive Vice President of the Shanghai E-House Real Estate Research Institute, noted that the 2026 Government Work Report explicitly emphasized "activating and utilizing existing land and idle housing facilities," signaling that urban development has moved beyond the era of incremental expansion. In the future, the real estate sector will increasingly rely on strategies such as revitalizing existing assets and urban renewal to secure development resources. Companies should expand their布局 in urban renewal, old neighborhood renovation, and redevelopment of underutilized land, while actively exploring models for unlocking the potential of existing stock.

Source: Shandong Provincial Department of Natural Resources