Beijing first failed land sale in two years shows developers’ woes
Two other residential plots have been sold at zero and less than 1pc premium to the starting bid prices
A land plot in Beijing failed to find a buyer for the first time in more than two years last Friday, as the government’s measures to cool the land market continue to take effect.
The failed sale of the 3.6 hectares (36,000 square metres) mix-use site that includes a residential parcel in the Pinggu district in the outskirts of Beijing marks a stark contrast to the successful sale of a similar but bigger site in the district that sold in August at the highest price level allowed by the government.
It is the first failed residential land sale since September 2015 after the central and local governments rolled out a slew of measures across Chinese cities to dampen land and property prices, which have hurt developers’ expansion and sales income.
“Failed land auction, especially for residential land, is very rare in Beijing,” said Zhang Dawei, a senior analyst with Centaline Property.
“Distant location is one factor, but another important reason is after a year of land acquisition race, most developers have run out of the firepower.”
With weakened sales from the cooling measures, Zhang said developers’ spending power had shrunk and their outlook of the market dimmed.