Prices of homes adjoining a prime residential site in Beijing have been given a boost after the site was sold for a record-breaking price last week.
'The transaction prices of homes near the site have gone up by about five per cent since the land auction because owners raised their asking prices after the site was sold,' said Dickson Wong Hung, chief executive for northern and southwest China at estate agency Centaline Property.
Private local developer Sinobo Group won the Haidian site last Tuesday with the 46th bid of the auction, paying 2.63 billion yuan (HK$3.21 billion), or 33,831 yuan per square metre.
That made it the most expensive site in the capital in terms of floor area, despite the curbs in place to try to limit home price rises.
The price surpassed the previous record for a residential site - 29,859 yuan per square metre, paid for land in the capital's Shunyi district in 2009.
Some mainland media reported that a small number of flat owners in the vicinity of the site raised the asking prices of their properties after news of the auction. One report cited an example of a luxury-home owner who originally offered his home for 5.2 million yuan, but after the auction marked the price up to 5.35 million yuan.
'But the price increase has been quite mild given that Beijing's home market is still affected by home purchase restrictions. If flat owners attempt to raise their prices much more they may have difficulty finding buyers,' Wong said.
Transaction volumes had not increased significantly, he added, since the market was expecting the site to be sold at a record high price, and the average price of homes near the site - all high-end flats - was 55,000 to 60,000 yuan per square metre.
'Flat prices in Beijing climbed about 10 per cent in the first half of July compared with the first half of June. This was due to interest rate cuts and credit loosening as the nation is seeing slower economic growth,' said Wong.