Land put up for auction by the Shanghai and Beijing municipal governments has either been withdrawn or generated poor response as developers tightened their purses amid the global credit crunch. Shanghai has withdrawn three sites from auction as they failed to draw any bids, while three out 10 sites being offered for sale by the Beijing government attracted only one bid each. To attract interest, the Suzhou municipal government did not set floor prices for 24 plots of land recently released for auction. Michelle Sze, the head of investor relations at Singapore-listed Yanlord Land Group, said developers were exercising extreme caution in land acquisitions in the face of volatile global financial markets coupled with slackening housing demand. 'Cash is king now. It is hard to draw interest from developers unless they have exhausted their land reserve,' Ms Sze said. It was important to improve the cash-flow position at a time of growing uncertainties worldwide, she added. Yanlord paid 2.6 billion yuan (HK$2.95 billion) for two sites in Shanghai and Tianjin this year. 'Our land reserve will be sufficient for development for the next five years,' Ms Sze said. Asked if Yanlord was interested in participating in the Suzhou land auction, she said it was a gimmick to promote the land sale by the municipal government. 'Location is the determinant factor [when we acquire land],' she said. Faced with high investment risks in the property market, she said the firm preferred to spend surplus capital by buying back its stock after a more than 70 per cent fall this year. Alva To, the North Asia head of consultancy for property consultant DTZ, expects developers' desire to acquire land would remain low until the end of the year. 'Everyone will play it safe and will be reluctant to spend,' he said. Meanwhile, China Citic Bank Corp vice-chairman Su Guoxin was quoted by Hexun.com as calling for the relaxation of mortgage ceilings for second-home buyers. The remarks came after the number of regional governments drawing up stimulus measures to stop declining property prices rose to 18. In September last year, the central bank raised the required down payment for a property to 40 per cent from 30 per cent if the buyers already had a flat under mortgage. The interest rate for mortgages was 1.1 times the normal rate for those buying second flats. Ms Sze said any relief on down payments and mortgage rates for second-home buyers would help to prop up the market.