First fall in mainland land prices for 8 years
Land prices on the mainland fell for the first time in eight years in the first quarter, as developers were slow in replenishing land amid the uncertain outlook for the property sector.
The Ministry of National Land and Resources said the composite land price, which includes commercial, residential and industrial areas in 35 major cities, averaged 3,189 yuan (HK$3,820) per square metre in the quarter, a 2.25 per cent drop from the same period last year.
Land prices had gained annually since 2002, with the growth rate reaching 13.37 per cent in 2007. Price appreciation slowed to 0.47 per cent last year in a nationwide property market correction, China Business News said, citing official figures.
The Ministry of National Land & Resources said in its newly released survey that land prices would continue to decline this half of the year as demand for new sites remained weak because of falling home values.
Home prices in 70 mainland cities last month fell 1.3 per cent year on year while some areas reported a sharper decline.
Shenzhen fell 13.7 per cent and Guangzhou fell 4.5 per cent, the National Development and Reform Commission reported last week.
It has been estimated that more than 120 lots, primarily for residential use, were withdrawn from government auctions last year.
'The government has introduced a fiscal stimulus package to bolster the economy and the real estate sector, but it will take time before seeing a recovery,' the ministry said.
The biggest drop was in residential land sites, where the average price dropped 3.94 per cent year on year and 2.31 per cent quarter on quarter to 4,484 yuan per square metre.
The average price of commercial sites fell 0.21 per cent year on year and 0.4 per cent quarter on quarter, while industrial lots declined 1.1 per cent and 1.08 per cent.
Geographically, land prices in the Pearl River Delta area dropped 10.46 per cent year on year and 5.73 per cent month on month.
In the Bohai Rim, land prices rose 6.91 per cent year on year but fell 1.24 per cent month on month.
In the Yangtze River Delta area, average land prices fell 2.63 per cent year on year and 0.96 per cent month on month.