Mainland property developer Sunac China said it will approach land acquisition with caution as prices in some Chinese cities are unreasonably high.
“Land prices in cities such as Beijing, Shanghai and Shenzhen are too high,” Sunac chairman Sun Hongbin said in Beijing on Monday.
“Every company has its own price consideration when acquiring land, but when we look at the recent land prices in Nanjing and Suzhou, we see the risk is already too high at the current levels. I don’t see a bubble in the housing market as home prices are not too high when you take into account the land prices, but the bubble has formed in the land market.”
Land prices have been to some extent pushed up by government authorities, which set high opening prices for land auctions, he said.
“In Shanghai, opening prices for plots have been more or less the same as the transaction prices of previous land auctions. That’s how so many ‘land kings’ have been created,” Sun said.
Sunac will take a cautious approach in replenishing land reserves, he said. “We are not willing to pay a unreasonably high price for land, we have never done that.”