Land sales plunge in city due to un­cer­tain mar­ket out­look

Shanghai Daily - - BUSINESS - Cao Qian

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.

“The

lat­est

se­ries of

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.

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