Concrete Analysis | China’s heated land market is reaching boiling point

Land sales for 2017 have just begun in China and it is interesting to review the performance of these initial land sales in various cities amid the government’s tightened policies implemented to cool off sizzling land prices.

In many cities, the land market is red hot and reaching their peaks while the competition for limited land is fierce.

For instance, at one auction in Hefei’s Binhu district, 14.77 billion yuan (US$2.1 billion) in total was collected with premiums at four of the seven parcels reaching more than 200 per cent and one exceeding 300 per cent.

Despite curbs on land sales such as land price limitation and circuit breaker, the results of land sales in cities including Nanjing, Hefei, Foshan and Ningbo as well as some key parcels in Zhengzhou and Chengdu are a measure of the enthusiasm of developers.

At the first land auction in Nanjing on January 12, two parcels were popular with developers. One, G90 in Jiangning Binjiang district was sold at 11,077 yuan per square metre, one of the highest transaction prices on a per square metre basis in the city.

In Hefei the next day, seven sites in Xinzhan district sold for a total of 7.1 billion yuan, with premiums at several parcels coming to more than 100 per cent. Similarly, the price of parcels in Foshan and Ningbo also touched district highs.