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Beijing Cancels Land Auction After Bids Exceed Price Ceiling
April 28, 2010, 1:54 AM EDT
More From Businessweek
April 28 (Bloomberg) -- An auction of land in Beijing was cancelled after bidding exceeded a price ceiling set for the lot as the Chinese government expands efforts to rein in the nation’s property market.
The highest price bid for the Beijing lot, zoned for residential development, at the April 26 auction was 4,718 yuan ($691) per square meter, exceeding the 4,700 yuan per square meter limit set by the government, the Ministry of Land and Resources said on its Web site today. The ministry’s Beijing branch said it began setting limits on the price of land this month on a trial basis.
“Imagine a seller refuses your business because he thinks you are paying too much for his products?” Bank of America- Merrill Lynch analysts led by David Cui wrote in a report distributed today. “It demonstrates the type of pressure the central government is putting on local officials to get the property market right this time; this increases the risk of potential overshooting in the property market crackdown.”
China began requiring developers pay higher deposits for land purchases last month and banned banks from lending to developers found to be hoarding land as Premier Wen Jiabao pledged to crack down on real-estate speculation and keep housing affordable. Property prices in 70 Chinese cities gained a record 11.7 percent in March from a year earlier.
Land Limits
The Beijing branch of the land ministry this month began limiting how much land developers may buy, according to a statement posted to its Web site on April 21. Video will also be taken of land auctions, notary personnel will observe the bidding, and contracts between Beijing’s land bureau and developers for purchases of lots will be made public, according to the statement.
Separately, the land ministry’s Shanghai bureau said yesterday it had postponed the auctioning of four land plots previously scheduled for today to May 7, citing a “technical hitch.” The average price of land in 105 Chinese cities rose 8.1 percent in the first quarter from a year earlier to 2,700 yuan per square meter, Minister of Land and Resources Xu Shaoshi said last week.
China’s property stocks have plunged 20 percent this year, making them the worst performers among major industry groups. China Vanke Co., the nation’s biggest publicly traded developer, has fallen 28 percent this year compared with a 12 percent drop in the benchmark Shanghai Composite Index.
Regulators have halted share sales by property developers to give the Ministry of Land and Resources the chance to investigate if companies manipulated market prices, the China Daily reported today, citing an unidentified source close to the China Securities Regulatory Commission.
April 28, 2010, 1:54 AM EDT
More From Businessweek
April 28 (Bloomberg) -- An auction of land in Beijing was cancelled after bidding exceeded a price ceiling set for the lot as the Chinese government expands efforts to rein in the nation’s property market.
The highest price bid for the Beijing lot, zoned for residential development, at the April 26 auction was 4,718 yuan ($691) per square meter, exceeding the 4,700 yuan per square meter limit set by the government, the Ministry of Land and Resources said on its Web site today. The ministry’s Beijing branch said it began setting limits on the price of land this month on a trial basis.
“Imagine a seller refuses your business because he thinks you are paying too much for his products?” Bank of America- Merrill Lynch analysts led by David Cui wrote in a report distributed today. “It demonstrates the type of pressure the central government is putting on local officials to get the property market right this time; this increases the risk of potential overshooting in the property market crackdown.”
China began requiring developers pay higher deposits for land purchases last month and banned banks from lending to developers found to be hoarding land as Premier Wen Jiabao pledged to crack down on real-estate speculation and keep housing affordable. Property prices in 70 Chinese cities gained a record 11.7 percent in March from a year earlier.
Land Limits
The Beijing branch of the land ministry this month began limiting how much land developers may buy, according to a statement posted to its Web site on April 21. Video will also be taken of land auctions, notary personnel will observe the bidding, and contracts between Beijing’s land bureau and developers for purchases of lots will be made public, according to the statement.
Separately, the land ministry’s Shanghai bureau said yesterday it had postponed the auctioning of four land plots previously scheduled for today to May 7, citing a “technical hitch.” The average price of land in 105 Chinese cities rose 8.1 percent in the first quarter from a year earlier to 2,700 yuan per square meter, Minister of Land and Resources Xu Shaoshi said last week.
China’s property stocks have plunged 20 percent this year, making them the worst performers among major industry groups. China Vanke Co., the nation’s biggest publicly traded developer, has fallen 28 percent this year compared with a 12 percent drop in the benchmark Shanghai Composite Index.
Regulators have halted share sales by property developers to give the Ministry of Land and Resources the chance to investigate if companies manipulated market prices, the China Daily reported today, citing an unidentified source close to the China Securities Regulatory Commission.