Beijing halted a residential land auction as record land prices fueled expectations of further home-price gains and rising housing sales strained lending resources at public housing funds in some Chinese cities.
Beijing suspended the auction in the Shunyi district, according to a statement on Beijing land reserve center’s website Oct. 9. The move helped avoid setting a new high price in the area, according to realtor Bacic & 5i5j Group. Cities including Suzhou and Taizhou in eastern China have tightened lending at local housing providence funds after growing loan applications strained their capacity, the official People’s Daily reported today without saying where it got the information.
New-home prices in Beijing jumped 3.8 percent last month, the most among the 100 Chinese cities tracked by SouFun Holdings Ltd. (SFUN:US), after Sunac China Holdings Ltd. (1918) bought a site in the city for a record of more than 73,000 yuan ($11,932) a square meter (10.76 square foot) on Sept. 4. The land ministry told selected cities to boost land supplies and take measures to “eliminate abnormal land price signals” and better guide market expectations, according to a Sept. 26 statement on its website.
Beijing’s suspension of the Shunyi plot “is anything but unrelated to the land ministry’s stance,” said Hu Jinghui, a vice president at Bacic & 5i5j, the city’s second-largest real estate agency. Setting a new record land price in the region after Sunac’s purchase “would have spoiled the achievements of property curbs over the years.”
New-home prices in all 100 cities monitored by SouFun rose 1.07 percent last month from August, rising for the 16th consecutive month and defying three years of government measures aimed at keeping home prices in check, SouFun, the nation’s biggest real estate website owner, said in a statement Sept. 30. Rising home sales reduced pressure on developers to trim inventories and increased their pricing power, according to SouFun.
Withdrawals and lending from Shanghai’s public housing fund totaled 54.7 billion yuan in the first half, 83 percent more than inflows during the period, according to the People’s Daily report, which cited an unidentified official with the Shanghai Provident Fund Management Center. Such funds, managed by local governments and contributed by citizens and their employers on a monthly basis, typically offer lower lending rates for home purchases than banks.
To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at email@example.com
To contact the editor responsible for this story: Andreea Papuc at firstname.lastname@example.org