Major Chinese cities halt second round of centralised land sales after first round failed to curb developers’ appetite and tame prices

Shenzhen, Tianjin and Qingdao are among cities to call off their latest land auctions as they consider ways to improve the new system designed to cool the housing market

It comes after the first round of auctions under the new regime earlier this year failed to achieve the objective of taming the appetite of developers and keeping a lid on prices

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Qingdao in Shandong province halted the centralised auction of 100 plots of land on Wednesday. Photo: EPA

Published: 7:30am, 13 Aug 2021Updated: 7:30am, 13 Aug 2021

Several major Chinese cities including Shenzhen, Tianjin and Qingdao have called off their second round of centralised land sales as local authorities consider ways to improve the new system designed to cool the housing market.

It comes after the first round of auctions under the new regime earlier this year failed to achieve the objective of taming the appetite of developers and keeping a lid on prices.

Qingdao in Shandong province halted the centralised auction of 100 plots of land on Wednesday. Shenzhen called off the sale of 22 lots last week, and Tianjin postponed the auction of 61 lots until next month.

Under pressure from Beijing, the local authorities will try to come up with new stipulations and requirements for the second round of centralised land sales to avoid the high prices the first round generated, according to Zhang Dawei, chief analyst at Centaline Property Agency. Otherwise “it will be detrimental to real estate regulation,” he said.

The central government introduced the centralised land sale scheme earlier this year. The scheme, which aims to rein in land and home prices, stipulates that land must only be sold three times a year. The idea is to discourage developers from going on a buying binge as they are likely to consider using their funds more judiciously when limited to just three windows of opportunity per year.

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