Wuhan authorities call off land sale in latest effort to cool red-hot property prices

The authorities in Wuhan, the capital of central China’s Hubei province, called off a prime city-centre land auction on Tuesday, fearing its price was likely to hit a record high – the latest move by officials across the country to clamp down on surging home costs.

The 102,240 square meter residential and commercial site is located on the city’s historic Han Zheng Street – famous for small commodity markets – which is currently undergoing urban renewal.

Wuhan Land Resources and Planning Bureau originally planned to auction the site on Thursday with a starting price of 12.6 billion yuan, making it possibly the most expensive ever plot sold in the city.

But the bureau suddenly dropped the listing on Wednesday, “following the country’s macro-control requirements on the real estate market”, it said in a statement.

The suspension comes just weeks after the city raised down payment requirements on properties and banned third-home purchases, to cool the local market.

China launched a fresh round of policy tightening in September, with more than 20 cities rolling out restrictions on buying.

China has seen home prices surged not only in top tier cities, but also second tier cities like Wuhan, where new home prices have jumped 26 per cent in the past year, according to official data.

“There will be more tightening measures to come, and this cycle is likely to last another six to nine months,” said Zhang Dawei, chief analyst at real estate agency Centaline Property. “The property market is just too hot.”

Last month the government halted the granting of presale permits to developers in Beijing who they said were charging too much for apartments, while Shanghai authorities raised down payments for first-time homebuyers to 35 per cent from 30 per cent, and at least 50 per cent for buyers with outstanding loans.