Land sales plunge in city due to uncertain market outlook
LAND sales plunged significantly in Shanghai in the first half of this year as an uncertain market outlook coupled with tightened credit damped interest among developers.
B e t we e n January and June, 104 land parcels totaling 5 million square meters were sold for more than 45 billion yuan ( US$ 6.95 billion), the country’s major real estate website Soufun.com said yesterday.
That compared to 567 plots of land sold for 1.524 trillion yuan for all of 2010, Soufun data showed.
Pudong New Area was the most popular district with 22 plots sold in the first six months. Jiading was second with 17 while Minhang was third with 11. The three districts accounted for 45 percent of the city’s total land sales by space and 47 percent in terms of value.
Land designated for mainstream housing accounted for 41 percent, followed by 35 percent for affordable homes and 24 percent for commercial development, according to Soufun.
rein- in measures launched by the government have cooled down the market as home sales have been at low levels over the past few months,” said Zhang Wanyu, a Soufun analyst. “Real estate developers, facing ever-tightening credit and extremely sluggish sales, are now cautious in acquiring land and the uncertain outlook has also prevented them from making lavish bids for land.”
About half of the land plots were acquired at or close to the asking price and at least 19 parcels were purchased by entities comprising at least two companies, both significant increases from the same period a year earlier, Soufun said without providing detailed figures.
“The slack acquisition of land will probably extend into the second half as long as inflation remains high and monetary policy stays tight,” said Li Mingli, a research director with Century 21 China Real Estate.
Shanghai is not the only city in the country that saw land sales tumble. In Beijing, land transactions totaled about 32.5 billion yuan in the first six months, a 48.6 percent drop from a year earlier, according to a Beijing News report yesterday.