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Chinese cities boost land sales for income
Source: Xinhua |
August 30, 2012, Thursday
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Print Edition
Print Edition
CHINESE cities have moved to boost local land markets as a persistent economic downturn has undermined the fiscal incomes of local governments, analysts said yesterday.
Hangzhou, capital of Zhejiang Province, auctioned seven downtown land plots at their initial bidding prices this week after revenues from land sales in its main city areas dropped to a five-year low from January to July.
In Wenzhou, another property hot spot in the province in east China, a record number of 52 land spots were put up for sale at a local promotional fair last Saturday.
The concentrated sales reflect the intent of local governments, which depend heavily on land sales for fiscal revenues, to boost sales by offering low prices amid a cooling land market, said Cao Xudong, a researcher of the China Index Academy's Hangzhou institute.
The property market has cooled significantly since the central government started to introduce measures to cap runaway prices in 2010.
But home prices have picked up in recent months following the central bank's move to slash interest rates to buoy the slowing economy.
With a warming market, property developers have regained confidence to buy in the land market, Cao said, adding that local governments are more willing to sell as there are more buyers than in the first half.
In Beijing, 11 plots of land were put on the market this week. A general manager at Dayue Consulting estimated the city government will pocket at least 7 billion yuan (US$1.11 billion) from the auction, which will be held next month.
The market may see a transaction peak across the country in September. Data from the Ministry of Land Resources showed the government sold just 47,200 hectares of land in the first half, accounting for 29.6 percent of its full-year land supply target for 2012.
Hangzhou, capital of Zhejiang Province, auctioned seven downtown land plots at their initial bidding prices this week after revenues from land sales in its main city areas dropped to a five-year low from January to July.
In Wenzhou, another property hot spot in the province in east China, a record number of 52 land spots were put up for sale at a local promotional fair last Saturday.
The concentrated sales reflect the intent of local governments, which depend heavily on land sales for fiscal revenues, to boost sales by offering low prices amid a cooling land market, said Cao Xudong, a researcher of the China Index Academy's Hangzhou institute.
The property market has cooled significantly since the central government started to introduce measures to cap runaway prices in 2010.
But home prices have picked up in recent months following the central bank's move to slash interest rates to buoy the slowing economy.
With a warming market, property developers have regained confidence to buy in the land market, Cao said, adding that local governments are more willing to sell as there are more buyers than in the first half.
In Beijing, 11 plots of land were put on the market this week. A general manager at Dayue Consulting estimated the city government will pocket at least 7 billion yuan (US$1.11 billion) from the auction, which will be held next month.
The market may see a transaction peak across the country in September. Data from the Ministry of Land Resources showed the government sold just 47,200 hectares of land in the first half, accounting for 29.6 percent of its full-year land supply target for 2012.
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