Shenzhen sells 21 of the 22 plots in city’s second land sale this year, fetching the government US$7 billion
- Shenzhen Metro Group picked up the largest and most expensive site for the minimum bid price of US$974 million
- Cooling measures introduced by the Shenzhen government have brought down home prices in the tech hub by 10 per cent this year
The 21 sites fetched 45.3 billion yuan (US$7 billion), just 7.34 per cent above the minimum selling price of all 22 sites, with most of the lots swooped up by state-owned enterprises. Only one residential site in Baoan district, which had a minimum price of 1.77 billion yuan, was withdrawn from sale, as it did not receive any bids.
“The land sales show Shenzhen’s property market is more resilient compared to other cities,” said Yan Yuejin, director at Shanghai-based E-house China Research and Development Institute.
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Earlier this month, the Shenzhen government came up with a series of cooling measures. It lowered the maximum selling price of the 22 sites to 15 per cent of the base price, down from 45 per cent previously. It also cut the prices of new flats to be built on these sites between 3 per cent and 9.2 per cent and restricted each company and its subsidiary to a maximum of three sites.
Across China an array of policies have been implemented to tame the property market this year, including centralised land sales, preventing business loans from flowing to the housing market, discussions with local governments and a crackdown on speculation.
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“The move illustrates the central government’s determination to stabilise land and property prices to provide more affordable homes to cool the red-hot housing market,” said Huang To, the general manager for project development at real estate agency Centaline’s Guangzhou unit.
“The government does not want to see a collapse in land and home prices, which could pose a threat to the country’s economy,” he added, pointing out that the cooling measures have brought down overall home prices in the tech hub by 10 per cent so far this year.
The winning developer is required to sell homes built on the site for no more than 92,000 yuan per square metre. A residential project one block away in the same neighbourhood that went on sale in January was priced at 112,000 yuan per square metre.
“Home prices not only in Shenzhen but across the nation are bound to decline in the coming months,” said Centaline’s Huang.