Land sale revenue plunges in Chinese cities

Land sales revenue in 300 mainland cities - not including Beijing - plunged by nearly half in the third quarter from the same period last year as developers shunned government land sales amid a market downturn.

Analysts said developers might adjust their land replenishment plans if they could be convinced sales would improve after the central and local governments took steps to relax restrictions in a bid to bolster the sluggish property sector.

The China Index Academy said sales in 300 cities amounted to 415.9 billion yuan (HK$525.6 billion) for the three months to September. Revenue from residential sites dropped by half to 265.3 billion yuan as developers cut back their budgets for land acquisition, it said.

A separate survey by another research institute, China Real Estate Information (CRIC), found that land-sales volume in 100 major cities fell 6 per cent quarter on quarter during the third quarter, to 995.2 million square metres. On a year-by-year basis, it was down 47 per cent.

Total sales revenues fell 18 per cent quarter on quarter to 127.8 billion yuan, down 75 per cent year on year. The average land transaction price fell 13 per cent quarter on quarter, or a 52 per cent decline year on year.

China's property sector has been weighed down by high inventories and tight credit. In some cities, such as Ningbo , developers said it would take two to three years to absorb the inventory of homes.