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Currency rules relaxed for land auction

REAL estate developers are to be allowed to pay deposits in foreign currency in an auction for a piece of land in the Jing'an Temple area -- an apparent relaxation of local government rules. The official Website of the Shanghai Municipal Housing, Land and Resource Administration Bureau says that, in addition to the yuan, buyers may pay initial deposits in United States and Hong Kong dollars, euros and yen.

The 9,000 square meter plot is designated for commercial and mixed-used development.

"The relaxation of the restriction on overseas players can probably be regarded as a signal from the local government," Zhu Feng, general manager of Shanghai Chongrui Real Estate Market Research Co Ltd, said yesterday. "It is obvious the government wants to revitalize the land market by allowing more players into the game."

Some 15.42 billion yuan (US$2.25 billion) was raised at land auctions last year, 60 percent down on 2007's figure, 21st Century Business Herald reported yesterday.

Last year in Shanghai, 331 land plots were sold while 24 failed to find buyers. Final results for another 80 plots haven't yet been disclosed, the paper said.

At the end of 2007, the bureau stopped accepting currencies other than the yuan for land designated for residential, commercial and office use, mainly to prevent overseas "hot money" flowing into an overheated market.

The country tightened control of overseas investment after property prices rocketed over the past few years.


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