Land Revenue Drops in 20 Chinese Cities; Beijing Hit 5Yr Low06-28 14:54 Caijing
Land revenues in China’s 20 major cities have dropped across the board while Beijing’s land sales dipped to a record low by all measures, indicating increasingly squeezing demands under government’s resolution to crack down property speculation.
Statistics by Home Link, China's largest real estate agency, show that the 20 cities generated 226.4billion yuan (about 35.57billion U.S. dollars) from land sales in the first half of 2012, representing a 39.8% year-on-year fall, while the four largest first-tier cities including Beijing, Shanghai, Shenzhen and Guangzhou, reported a land revenue of 42.5billion, down 56.9% from last year.
Beijing was among the worst-hit cities amid the housing downturn as its land sales by volume hit a 4-year low while both the land premium rate and land lease revenue were down to a 5-year low in the first half of 2012.
However, the average premium rate in those 20 cities rose to 14.6% in June, compared with less- than-5% during the 10 months between last August and May, 2012.
“A bounce-back in land premium rate in June can’t last,” Home Link said, explaining that it is just a false picture propped up by precious few premium lands left.
Prudent developers stay on the sideline as their expectations for house prices in the future remain low, with a bloated inventory of unsold homes, said Zhang Dawei, analyst with Centline China, one of the largest real estate agencies in Shenzhen.
China’s housing market has seen dramatic drops both in prices and trade volume after the government started stringent measures to avoid an overheating bubble since 2010.
Zhang estimated land lease revenue in Beijing may find it hard to surpass 80billion yuan in 2012, hitting a record low, as declining house prices as well as trade volume continue to weigh on the city’s land purchases.
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