Three pieces of residential land in Fengjing town, Jinshan new town and industrial park in Jinshan District of Shanghai municipality were transferred on Feb. 21. 10 bidders bid for these three pieces of land which were finally gained by Beijing Construction Engineering Group, Shanghai Construction Group and Beijing Huafang Hecheng Real Estate Development Co., Ltd. at a total transaction amount of 3.39 billion yuan.
It is noticeably that except land in Jinshan new town receiving bidding from seven property developers, others were only bid by only one property developers. In the end, the land in Jinshan new town was traded at low premium and the other two pieces land at floor price.
Journalist of Economic Information Daily learnt that land policies in many places were tighter as regulation policies about real estate market around the Spring Festival were introduced. Under this background, land market which was booming last year cooled down and high premium rate generally came to an end in tier-1 and tier-2 cities.
Three pieces of residential land in Nanhui New City of Shanghai with an area of 166,000 square meters were transferred on Feb. 17 with total price starting at about 4.187 billion yuan. Finally, they were traded at about 4.23 billion yuan with premium at about 1 percent.
Land market in Beijing saw the first land auction on Feb. 16 after the Spring Festival. Two pieces of residential land in Liangxiang town of Fangshan district were transferred on that day, attracting competition from 8 housing enterprises and combos including China Oil & Foodstuffs Corporation, Anar and Country Garden. Finally, combo made up by Zhonghai Real Estate Group, Beijing, Capital Development Holding (Group) Co., Ltd., China Poly Group Corporation and Longfor Properties Co., Ltd. and combo composed of Gemdale Group and CIFI Group won the bidding with transaction price at 2.325 billion yuan and 1.81 billion yuan and premium rate at only 10.71 percent and 9 percent respectively.
In the opinion of Guo yi, marketing director of Yahao Real Estate Selling & Consulting Solution Agency, one of the reasons for the shrinking land market after the Spring Festival was the influence of change in bidders. “Recently, more and more housing enterprises constitute comb when bidding for land and it is not rare that 4 to 5 enterprises make up a combo. Large combo can avoid excessive ‘internal consumption’ during the bidding process”, said Guo.
“Premium rate of land transaction in most hot cities declines remarkably. For example, it is much lower than average level in 2016 in Shenzhen, Shanghai and other cities. Overall premium rate of land transaction keeps table expect in few popular cities.” Zhang Dawei, chief analyst from Centaline Property, viewed that several pieces of land recently traded in tier-1 cities such as Beijing and Shanghai saw nearly zero premium rate, “which indicated that land market begins to cool down under the strict regulation policy”.
According to statistics from research center of Centaline Property, land market in China continued to get cooled in January when compared with the fourth quarter of last year and there were only 61 cases of land transaction with transaction price at over 1 billion yuan. There were only 17 cases of land transaction with transaction price at over 1 billion yuan and premium rate more than 100 percent. The land with high price was mainly located in Hefei, Nancheng and other cities.
Zhang analyzed that many places successively launched tough regulation policies at the end of last year, which influenced housing market as well as land market. Particularly, some tier-1 and tier-2 cities introduced tightening measures specific to land market, which played an important role in curbing the high price of land.
Tianjin city released new mechanism on land transfer on Feb. 13. Higher quotation won’t be accepted when the bidding price reaches the ceiling price.
Before that, Being and Shanghai had introduced similar policies to further tighten the mechanism on land transfer and prevent occurrence of high-priced land. Zhang indicated that “Nanjing and other cities also set price ceiling at land transfer. Under this background, premium rate of land transaction at hot cities decreases continuously.”
Translated by Vanessa Chen
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