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Beijing latest Chinese city to report improved land sales, rising property sector sentiment
- Fewer plot withdrawals, increase in premiums suggest the marketing is warming up, analyst says
- The central and local governments have recently eased measures to boost real estate
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China’s land sales reported a slight recovery last month following the introduction of easing measures across the country.
Beijing, which finished its first round of land sales on February 16 and 17, fetched 48 billion yuan (US$7.6 billion), or 73 per cent more than the third round last year. Land in China can only be sold three times a year, according to a centralised scheme introduced by the central government in early 2021.
“We saw fewer plots withdrawn and an increase in premiums, which suggests that the marketing is warming up again slightly,” said Shen Meng, a property analyst with Southwest Securities.
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The slight improvement came after the central as well as local governments unveiled easing measures to boost real estate sector sentiment. These measures were prompted by the withdrawal from sale of about a third of the 700 parcels of land put up for tender across China since September last year.
China’s cash-strapped developers, hit by curbs introduced to keep their borrowing under check, had shown little interest in spending big on land. Some major Chinese property developers have failed to pay their debts since late last year, which prompted the tightening measures.
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To stop the cracks in the sector from widening, China cut the mortgage rate and took the loans developers used for mergers and acquisitions out of the calculation of their debt. Local authorities too eased policies to help the real estate industry recover.
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