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SCMP Reporter

A public land auction in Guangzhou has drawn a wary response from developers, with bidding low.

 Only one of two parcels offered yesterday was sold, indicating that concerns about the city's property market were unlikely to diminish soon.

 'The results were unsatisfactory,' said a Guangzhou State Land Bureau official.

 'But it reflects the real situation. There's still a shadow over the market and developers are taking a wait-and-see attitude.'  Earlier in the week, the municipal statistical bureau said Guangzhou commercial and residential sales for the first six months of this year were down more than 20 per cent year on year.

 Developers sold about 917,000 square metres of commercial land, a 26.7 per cent year-on-year decline, and about 821,000 sq metres of residential space, representing a 22.9 per cent fall.

 Secondary-market home buys, increased 55 per cent, as 2,152 deals were concluded involving about 286,000 sq metres of property.

 Yesterday's auction was only the second time Guangzhou had attempted to dispose of land through public bidding.

 The first auction in March produced similar lacklustre results, with only one of four parcels attracting interest.

  Yesterday, a 38,473 sq metre site in the southern part of the city fetched 120 million yuan (about HK$112.8 million), slightly above the 113.5 million yuan reserve price. The second parcel failed to attract bids on its 45 million yuan minimum.

 A third parcel in Yuexiu District, was sold at tender to a local company for 32.88 million yuan, slightly above the 31.38 million yuan minimum asking price.

 Ye Fuqiang, executive director of Guangzhou Real Estate, said: 'Developers are still holding a lot of land and empty housing.

 'They need time to handle their reserves.'  The Guangzhou government, which is hoping to earn three billion yuan through land sales this year, is undertaking a number of measures to prompt the recovery of its property market.

 These include policies to encourage personal home buys in the primary and second-hand markets, and stricter administration over land supply.

 On Monday, the Guangzhou State Land Bureau announced that 25 parcels of idle land, amounting to 403,711 sq metres, had been reclaimed from developers.

 It was the ninth such buy-back by the city in the past two years.

 Li Weijie, director of the land bureau vowed that more would follow.

 Shi Hongping, director of the city's planning bureau, said another 101 parcels involving about 2.31 million sq metres of land would be reclaimed in the coming days.

 Despite yesterday's tepid auction results, the city remained committed to the auction process, the senior land bureau official said.

 He said a third auction would probably be held in October.

PROPERTY 



Land sale draws scant interest