China’s developers bid more for land, betting supportive measures will revive property market

Name: World’s most indebted developer, China Evergrande Group, buys time to repay more creditors
Uploaded: 2022-04-12T02:00:24.000Z
Duration: 1 min 46 s
Description: World’s most indebted developer, China Evergrande Group, buys time to repay more creditors

The premium on parcels of land in eight major cities that completed their first round of auctions for the year was up from 2021

Most of the winning bids in the latest auctions have come from state-owned developers

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Land in China can only be sold three times a year, according to a centralised scheme introduced by the central government in early 2021. Photo: EPA-EFE

Pearl Liu

Published: 10:00am, 12 Apr 2022Updated: 11:00am, 12 Apr 2022

Competition between developers for land in mainland China has intensified, recent auction figures suggest, a sign that supportive measures may be soothing the country’s bruised property market.

The premium on parcels of land in eight major cities that completed their first round of auctions for the year was 5.4 per cent, an increase from last year, as home builders were prepared to go higher with their bids. The vast majority of the plots were bought by state-owned developers.

The cities included Beijing, Wuhan in central Hubei province and Chengdu in the southwestern Sichuan province.

Land in China can only be sold three times a year, under a centralised scheme introduced by the government in early 2021.

Hefei in southeastern Anhui province fetched 19 billion yuan (US$2.98 billion) in its first round, which finished on March 26, nearly triple what it took in the third round last year. Its land premium – the difference between the reserve price and the eventual selling price – was 12.5 per cent, the highest among the eight cities.

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World’s most indebted developer, China Evergrande Group, buys time to repay more creditors

In the second and third auctions of 2021, which took place from May to the end of the year, the average premium across the country was just 3 per cent. About a third of the 700 parcels of land put up for tender were withdrawn in the last quarter.

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