Beijing puts up 12 plots for sale by tender
Home prices are expected to rise further as local governments seek to boost revenues
Beijing has put out a dozen plots of land for sale this month, including one in its central area, which is expected to add fuel to the real estate market and further drive up home prices.
A 20,664 square metre site in the central district of Xicheng for residential and financial use carries a bottom price of 3.55 billion yuan and requires a deposit of 1.1 billion yuan from bidders.
In the first 23 days of this year, Beijing raked in land sale revenue of 40.3 billion yuan, according to data from CRIC, a unit of real estate services firm E-House (China). The city's land sale income hit a record 182 billion yuan in 2013.
In other top cities such as Shanghai, Hangzhou, Shenzhen and Guangzhou, the Year of the Horse also began with bumper land sale revenues, sustaining a trend started last year amid developers' forays into the country's most lucrative market.
"The heat is not abating in the land markets in various cities," CRIC said. "Local governments are actively putting out land lots for sale in response to the leaders' call for more supply."
"But it seems they are also seeking to increase land sale revenues" due to their reliance on such incomes to finance public budgets, it added.
On the other hand, developers are on a land-buying spree in top-tier cities that have better infrastructure and attract money from all over the country.
Hong Kong-listed Franshion Properties bought a site for building homes in Shanghai last month at a gross price of 10.1 billion yuan, up 112 per cent over the bottom price set at the beginning of the bidding.
The floor space cost of 47,609 yuan per square metre for the project was already higher than home prices in the neighbourhood, local media reported.
Soaring land cost is partly blamed for the rise in home prices, although various tightening policies by the government, including home purchase restrictions, have started to ease the pace of gains.
New home prices in 100 mainland cities increased for the 20th consecutive month by 0.63 per cent in January, according to the China Index Academy, the country's biggest real estate data provider and website operator.
Year on year, they rose 11.1 per cent, narrowing from December's gain of 11.5 per cent, on slack demand and supply due to the Lunar New Year.
Data from E-House confirmed the signs of stabilisation. It said prices of new homes in 288 major cities climbed 9.39 per cent in January from a year earlier, easing from December's annual gain of 10.04 per cent.