Land sales on the mainland slowed sharply last month as developers turned cautious in their bidding for new sites.
The total number of sites that were sold for commercial, industrial and residential developments registered a month-on-month decrease of 53 per cent to 2,145 in January, according to transactions monitored in 300 cities by the China Real Estate Index System (CREIS).
The average price at which the deals were done fell six per cent to 1,124 yuan (HK$1,384) per square metre. For residential sites alone, prices dropped 4 per cent to an average of 1,509 yuan per square metre, but that was 59 per cent higher than in January last year.
"The significant drop in the number of deals was because more land was put up for auction in December. Everything is slowing down now as the Lunar New Year holiday approaches," said Clement Luk, chief executive at Centaline (China) for Eastern and Northeastern China.
The Lunar New Year holiday runs from February 9 to 17.
Luk said developers had also become more conservative in their bidding because land prices had risen significantly over the past year. But he forecast sales activity and prices to pick up again after the holiday.
A total of 3,806 sites were offered for auction during the month, down 38 per cent from December. The number of residential sites offered for sale was down 39 per cent to 148 million square metres. In Beijing, eight residential sites were sold, capable of being developed into projects with a total gross floor area of 790,000 square metres. The average price of the transactions was 11,192 per square metre.
In Shanghai, 15 residential sites were sold at an average of 5,352 yuan per square metre; in Guangzhou, seven residential sites were sold at an average price of 1,716 yuan per square metre; and in Shenzhen, five residential sites were sold for an average of 7,472 yuan per square metre.
Luk said home sales in Shanghai also slowed during the month as buyers postponed decisions until after the Lunar New Year. "But February sales will definitely be better than the same period last year," he said.
CREIS said average home prices in 100 surveyed cities posted a month-on-month 1 per cent growth in January to 9,812 yuan per square metre, its eighth straight rise. Sixty-four cities reported price gains, with 38 recording gains of more than 1 per cent, up from 26 in December.
In 10 major cities, including Beijing and Shanghai, the average transaction price was 16,417 yuan per square metre, up 1.61 per cent from December and 2 per cent on January 2012.
Homelink, one of the biggest property agents in Beijing, said the average price of new flats in the capital rose 9.4 per cent month-on-month to 23,281 yuan per square metre in January.