Developers' aggressive land bidding buoys China market and spurs sales
Aggressive bidding for land by developers buoyed confidence in the mainland property market and led to strong property sales in major cities in the first week of September.
Data from the China Index Academy showed more than 60 per cent of the 41 major cities on the mainland posted growth in weekly property sales for the period September 2 to 8. The surge was led by Wenzhou, where sales were up by 150 per cent on the same week last year.
Dickson Wong Hung, chief executive at Centaline (China) for northern and southwestern China, said September and October were traditionally peak sales months.
"A number of sites sold at high prices, [which] also encouraged people to buy flats. Many flat owners in Beijing's urban areas raised their asking prices for their flats after the land sales."
Alan Chiang Sheung-lai, head of residential at DTZ Greater China, said developers had bid aggressively. Sun Hung Kai Properties, he noted, bought a site in Shanghai for 21.77 billion yuan (HK$27.37 billion) last week.
"Including their potential construction costs, the company will have to spend about 30 billion yuan on this project. That's a large amount, and the confidence it showed encourages people to buy flats."
Buyers were also tempted back into the market because mortgage rates were still at a low level, Chiang added.
However, it remained to be seen if the strong property sales would be maintained with fewer new projects available for release in the next few months.
Ten new projects with more than 1,500 flats were released for sale in Shanghai at the weekend, according to property website Sina House, and nearly 80 per cent of the flats were sold.
Data from the Beijing Municipal Commission of Housing and Urban-Rural Development showed 2,286 secondhand flats changed hands in the first week of September, up 18 per cent on the same period last month.