Land sales drop amid dip in supply with developers wary of higher prices
January decline was because of the large number of mainland sites put up for sale the previous month, with activity slowing ahead of holidays
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.