Chinese developers lose appetite for land in Greater Bay Area as weaker sales, tighter credit clip their wings
- The 20 biggest builders bought about a third less plots of land in the bay area after their shopping spree when the initiative was launched
- The slowdown comes amid slumping property sales and after Beijing instructed banks to restrict their loans to the sector
Chinese developers have been losing their appetite for land in the Greater Bay Area as they find themselves short of funds amid weakening property sales and a government crackdown on debt, new figures show.
Ninety-three parcels of land were snapped up by the 20 major developers tracked by data consultancy Real Estate Foresight in the 12 months to July in the nine cities in Guangdong Province that are part of the bay area plan.
That represents a slump of around 30 per cent from the previous year when those same builders splashed out on 132 plots.
The plan, encompassing Hong Kong, Macau and southern Chinese cities including Shenzhen, Guangzhou and Zhuhai, is destined to be China’s innovation and financial powerhouse and embodies President Xi Jinping’s ambition to create a hub to rival the likes of Silicon Valley and the Tokyo Bay Area.
With its economic output and population set to skyrocket, the country’s leading builders were desperate to get a slice of the action when the bay area initiative was first announced in 2017.
In terms of total value, the 20 developers paid 131.3 billion yuan for the sites, just 5 per cent less than the 138.4 billion yuan they paid in the earlier period.