Shanghai has cancelled five planned land sales worth a total of 10 billion yuan (US$1.47 billion) in 20 days, underscoring dampened appetite of developers weighed on by tightened funding and tepid sales. The latest abandoned bidding for a prime site in Yangpu district to sell from a starting price of 4.6 billion yuan, brought cancelled land auctions this month to five, according to an announcement on the Shanghai Land Market website on Monday. It did not give reasons for the cancellation, but said no party had put forward a price by July 20. The Yangpu site is within the city’s inner ring road and is slated solely for residential development, compared with the four previously cancelled sales where the sites were in the suburbs and two of them were for commercial use. Yang Hongxu, vice director of E-house China R&D Institute, said the steep asking price, translated to 66,000 yuan per square meter, deterred developers. Surrounding projects sold at 100,000 yuan per sq m, meaning if developers sold the project at a similar price, the gains would be minimal, he said. Chinese developers are facing a liquidity squeeze and rising funding costs as a result of government’s deleveraging campaign and efforts to rein in housing prices. “The cancellation is probably due to the unattractive bidding prices that developers intended to make,” said Alan Jin, property analyst with Mizuho Securities. “The developers are suffering a rough time facing the price cap and tightening credit. It dose not make sense for them to bid high.” According to the Shanghai Bureau of Statistics, citywide property investments in the first half grew 3.6 per cent, while new home starts slumped 6.4 per cent. Property sales rose 3 per cent. Lu Wenxi, a senior analyst with Centaline Shanghai, said the slow sales means slower collection of cash for developers, which made them much more cautious in land spending. More land supply from government since June has also convinced them to wait for the better plots to become available. “With limited funds, they would rather spend the money in the best possible plot,” he said. The cooling land market is not limited to Shanghai. On Monday, Suzhou, a city near Shanghai, also said three plots planned for sale failed to find buyers. In Shenzhen, 26 parcels of land were sold in the first half, fetching 10.9 billion yuan, down 67 per cent from the same period last year. In June, a commercial site with development for housing in Qianhai, the city’s new financial district reportedly failed to sell. Across the country, although total land sales in 40 cities monitored by E-house in the first half jumped 128 per cent to 1.04 trillion yuan, the average price and premium paid slumped. Premium for first-tier cities was 11 per cent, down from 21 per cent in the first half of 2017, and the premium for second-tier cities is 17 per cent, down from 32 per cent. Country Garden, the country’s largest developer by sales, in June has order a halt of land acquisition in third, fourth and fifth-tier cities, scaling back a previously ambitious plan to be present in all counties in China, according to Shanghai media the Paper.