Nov. 2 (Bloomberg) -- The southern Chinese city of Guangzhou canceled the auction of some land plots yesterday, the second time in two weeks the capital of Guangdong province has called off such sales.
Local authorities canceled the auction for 12 of the 18 plots of land on offer, the Guangzhou Municipal Land Resources and Housing Administrative Bureau said on its website, without giving a reason for the terminations. The city also canceled the auction of three plots on Oct. 22, according to the website.
Premier Wen Jiabao has sought to rein in the nation’s property market on concerns an asset bubble in real estate may derail economic growth and that rising prices may spur social unrest as fewer citizens are able to afford homes. That effort has included limits on lending and financing for developers, with Wen saying Oct. 29 that measure to curb the property market would be “firmly” maintained.
“Developers’ demand for land is not high in general, mainly because of the credit squeeze,” said Danny Bao, a Hong Kong-based analyst at Daiwa Securities Capital Markets. “It’s the same around the country, and probably won’t be better next year,” he said.
The city of Wuhan, capital of central China’s Hubei province, postponed the auction of nine plots of land twice last month, the official Xinhua News Agency reported yesterday. Local authorities sold 10 other plots of land at the base bidding price, according to the report.
The credit outlook for Chinese developers will be “increasingly severe” amid government curbs, Standard & Poor’s said in a report on Sept. 27. The government this year increased down-payment requirements and mortgage rates on some homes and imposed housing purchase restrictions in about 40 cities.
China’s home prices fell for a second month in October, according to SouFun Holdings Ltd., owner of the nation’s biggest real estate website. They fell 0.23 percent in October from a month earlier after a decline of 0.03 percent in September, the company said yesterday.
--Penny Peng. Editors: John Liu, Linus Chua
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