Foshan introduces new regulations for the real estate market, allowing for deferred construction and a significant reduction in liquidated damages for potential properties

In the newly issued regulations, the "Notice of Foshan Natural Resources Bureau on Supporting the Delayed Construction of Real Estate Projects" clarifies the scope of application, application conditions, and deadline adjustment standards of the delayed construction policy, covering all types of unfinished and undeveloped real estate projects. The policy is both inclusive and targeted. According to the notification requirements, real estate projects that sign land transfer contracts before September 16, 2025, whether they are currently in a state of not yet started or have started but not completed, can apply for a postponement of construction to relevant departments before the start and completion deadline stipulated in the original contract or supplementary agreement, without the need to submit complex materials, simplifying the application process, and improving the efficiency of policy implementation.

Specifically, the policy of delaying construction is implemented in a classified manner, accurately matching the actual needs of different projects. For projects that meet the conditions but have not yet started construction, the start date can be extended by one year on the basis of the original agreement, and the completion date can be correspondingly postponed to provide sufficient preparation time for real estate companies and alleviate the pressure of capital turnover and planning adjustments; For projects that have already started but have not been completed, one can directly apply to extend the completion deadline by one year to help real estate companies allocate construction resources reasonably and avoid the risk of breach of contract caused by tight schedules. This measure is in line with Foshan's previous policy of "optimizing the start and completion time limit of real estate projects", further expanding the coverage of the deferred construction policy.

It is worth noting that the new regulations have also provided relief support to existing projects that have already committed default, significantly reducing their historical default costs. The notice clearly states that for projects that have already committed construction and completion breaches, if the breach liability can be accounted for until November 18, 2025 and the corresponding penalty has been fully paid, the deferred construction policy can also be applied. Under the policy tilt, the new start or completion deadline for such projects can be extended up to November 18, 2026, which not only helps real estate companies resolve historical breach disputes, but also further reduces the short-term performance pressure on enterprises, providing strong support for the restart and smooth completion of existing projects.

The intensive introduction of two new regulations this time is not a single release of policy benefits, but an important measure taken by Foshan to accurately alleviate the difficulties faced by real estate enterprises in combination with the current development of the real estate market. Behind it is the city's firm determination to optimize real estate supply and stabilize market expectations. Based on the performance of the Foshan real estate market in 2025, the supply of new houses in the city has decreased year-on-year, and there is still pressure to reduce inventory. Some real estate companies are facing problems such as tight capital turnover and difficulties in fulfilling project deadlines. The combination policy of delaying construction and reducing liquidated damages targets the pain points of real estate companies, which not only avoids some projects from stagnating due to excessive performance pressure, but also effectively revitalizes existing land and project resources, and promotes the orderly development of real estate projects.

It is reported that this new regulation also connects with the real estate support policies previously introduced in Foshan, further optimizing the standard for breach of contract for construction and completion, adjusting it to 0.05% per day. In addition, when calculating the breach of contract for completion, the penalty will be calculated based on the proportion of overdue construction area to the total construction area, further refining the accounting standards, reducing the cost of breach of contract, and forming a joint relief force. Industry insiders have stated that Foshan's policy of delaying construction and reducing liquidated damages has accurately balanced policy supervision with practical difficulties faced by enterprises. It not only standardizes the order of land development and utilization, but also provides flexible contractual space for real estate companies.