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Shanghai land market booms, supply and sales both hitting highs

By Cherry Cao | August 12, 2014, Tuesday | Online Edition

SHANGHAI'S land market rebounded significantly in July following a subdued first half, with both supply and sales hitting the second highest in 2014 only after the robust January.

Excluding those designated for public uses, 18 pieces of land parcels totaling 729,000 square meters -- 10 for housing development and eight for commercial and office uses -- were sold last month, a surge of 557 percent by area from June, the country's leading real estate website www.fang.com, previously known as soufun, said in a latest report.

Transaction value, meanwhile, soared 685 percent month over month to 12.25 billion yuan (US$1.975 billion). That compared to 57.7 billion yuan registered in the first six months of this year.

"Despite cautious momentum in the overall property market amid sluggish home sales, the city's land market recorded some strength last month with non-local housing developers, including new entrants, being particularly active in building and expanding their land banks across the city," said Li Zongzhou, a fang.com analyst.

Land parcels auctioned last month were sold for an average of 12 percent higher than asking prices, the lowest level so far this year, fang.com data showed. The figure stood at 51.4 percent in the first three months and fell to 31.1 percent in the second quarter, according to earlier market data.

However, such strength is not likely to extend into August. Only five parcels totaling 227,000 square meters are scheduled to be released for auction this month, a dive of 73 percent from July. Starting prices for these parcels have been set at 2.78 billion yuan, a month-over-month drop of 75 percent, fang.com said.

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