Still lots of competition for land
While many analysts are predicting tougher times for China’s real estate industry in 2014, at least by one gauge the country’s property developers still believe that there is money to be made.
According to a report in today’s Wall Street Journal, the average price of residential land in China rose for the seventh consecutive quarter during the period from October through December of 2013, with the Journal relying on statistics from the Ministry of Land and Resources as its source.
The Ministry’s survey of 105 Chinese cites found that the average price of land for housing purposes went up 2.6 percent during the fourth quarter of 2013, to RMB 5,033 ($830) per square metre.
Upbeat Despite the Down-Grade
In the past few months, the tightening of financial markets and rising land prices have caused some analysts to grow pessimistic about China’s real estate market.
During December Wee Liat Lee, Regional Head of Property Research at BNP Paribas, downgraded the overall industry for 2014 from “Improving” to “Stable,” due to concerns over land supply and the rising prices that accompany increased competition for land.
However, developer seem to remain eager to buy up whatever land is available, despite rising costs. Indeed, the rising prices being paid for downtown sites, may be leading some cities to make more land available.
More Land Sales in the Major Cities
In the first 23 days of this year, Beijing raked in land sale revenue of 40.3 billion yuan, according to data from CRIC, a unit of real estate services firm E-House (China). The city’s land sale income hit a record 182 billion yuan in 2013.
A report in the Shanghai-based National Business Daily showed that Beijing planned to put 16 plots of commercial land measuring a combined 24,260 square meters up for auction this month. China’s capital sold off 26 plots of land during January, bringing in RMB 40.59 billion from property developers confident of their ability to make a profit from rising home prices.
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