The Shenzhen municipal government has begun seeking opinions from developers about their land purchases before officially releasing sites for sale this year, sparking speculation it may change the land auction system.
Developers said the government might remodel land sales from the open auction method to a system similar to the application list in Hong Kong to ensure there would be buyers.
'Last month, they asked us a number of questions like: 'Do you want to buy land sites now? Where do you want to buy? What kind of land plots will lure your interests?',' a senior manager at a local developer said. 'I have a feeling they are preparing to launch a new land sale system modelled after Hong Kong.'
Under Hong Kong's application list system, a developer can trigger an auction of a site in the land reserve list by making a guaranteed bid that is at least 80 per cent of a site's minimum price.
'[The government] started seeking our opinions at the end of last year,' the manager said.
With the ailing property market, developers are less aggressive in triggering sites for auction and site withdrawal by the government can harm market sentiment further. The application list system will ensure government sites for sale will not be withdrawn.
Poor land sales in Shenzhen last year might prompt the government to ask the questions, the manager said. However, the government had not disclosed any plan to change the land sale system, he added.
Shenzhen launched 20 residential and residential-commercial sites last year. Of the sites, nine, all in the suburbs, were withdrawn after failing to attract builders' interest.
Wang Wenjin, an executive vice-president of China Vanke, the largest developer on the mainland, also confirmed that Shenzhen had tested their buying interest recently.
Mr Wang believed the government would gauge developers' interest before it announced the land sale system. It would not openly launch anything that would harm the market, he said.
The municipal government did not comment on the issue and a spokesman said the city's land sale system through public auctions and tenders remained unchanged.
Meanwhile, sales volume has shown a strong improvement in Shenzhen's residential market since November last year.
Last month, 488,840 square metres of residential space were sold. This compares with average monthly sales of 339,600 sqmetres last year, according to soufun.com.Topics: China Vanke Shenzhen