Lower-tier city land prices gain­ing ground

China Daily (Hong Kong) - - BUSINESS - By WU YIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

Both land trans­ac­tion fees and the av­er­age price of land in 300 cities in China rose in the first half of 2017, with lower-tierci­ties ex­pe­ri­enc­ing the fastest growth as poli­cies on res­i­den­tial mar­kets tight­ened in first-and­sec­ond-tier cities.

Ac­cord­ing to data from China In­dex Academy, a Bei­jing-based realty in­for­ma­tion ser­vice provider, the com­bined in­come from leas­ing land in China was 1.5 tril­lion yuan ($220.6 bil­lion) in the first half year, 34 per­cent year-on-year in­crease.

About 374 mil­lion square me­ters of land were trans­acted across China. The av­er­age price of the trans­acted land was 2,249 yuan per square me­ter, a yearon-year in­crease of 40 per­cent.

First-tier cities have ac­cel­er­ated sup­plies of land for res­i­den­tial de­vel­op­ment as a move to curb fast ris­ing housing prices, and the av­er­age premium was sta­ble at some­where be­tween 25 per­cent and 30 per­cent, show­ing that com­pe­ti­tion for ac­quir­ing land was main­tained at a rea­son­able level.

How­ever, in some lower-tierci­ties, such as Qingyuan in Guang­dong prov­ince, and Nan­chang in Jiangxi prov­ince, premium reached up to more than 100 per­cent, show­ing that de­mand was much greater than sup­ply, and de­vel­op­ers sought land parcels af­ter pur­chase lim­its against spec­u­la­tive buy­ing were tight­ened in ma­jor cities.

“It is ex­pected that in the sec­ond half of 2017, land sup­ply will fur­ther grow across China, par­tic­u­larly in key cities where new res­i­den­tial prop­erty stocks are lim­ited. De­vel­op­ers also need to watch out for risks in lower-tier cities,” said Yan Yue­jin, re­search di­rec­tor of E-House China R&D In­sti­tute.

ZHANG TAO / FOR CHINA DAILY

Con­struc­tion work­ers in­stall ther­mal-in­su­lat­ing walls at a prop­erty project in Zhengzhou, cap­i­tal of He­nan prov­ince.

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