Shanghai’s First Land Auction of 2022 Bags USD7.4 Billion
Zheng Na
DATE:  Jun 02 2022
/ SOURCE:  Yicai
Shanghai’s First Land Auction of 2022 Bags USD7.4 Billion Shanghai’s First Land Auction of 2022 Bags USD7.4 Billion

(Yicai Global) June 2 -- The first land auction that Shanghai organized this year has generated a transaction value of nearly CNY49.6 billion (USD7.4 billion).

At yesterday’s event, which was held on the very first day after the Covid-19 lockdown was lifted, they were auctioned 36 land lots for commercial housing, 20 of which were successfully sold.

The average premium between the land lots’ final prices and their corresponding reserve prices was 1.3 percent, according to data from industry organization Keyland. 

Property developers were particularly interested in a property on Xietu Road in downtown Xuhui district, which was sold at a premium of 9.6 percent.

The highest-paid land lot at yesterday’s auction was one in Changfeng community, in Putuo district, which was sold for CNY6.4 billion (USD950.6 million) at the asking price.  

Property developers still face high pressures, and their interest in acquiring land has not improved from last year, an executive in charge of a southern China-based property developer which took part in yesterday’s auction told Yicai Global. 

Most of the participants of these auctions were local government or central government-owned developers. 

The housing market’s downturn trend that started last year imposed great operating pressure on the private real estate developers, whose capability in taking part in land auctions was weakened, Lu Wenxi, a senior market analyst at Centaline Property in Shanghai, told Yicai Global.

The threshold for land purchase in Shanghai is still high, while most developers are still trapped in cash flows and debts-repaying pressures, Song Hongwei, research director at Tospur Real Estate Consulting told Yicai Global, added that about 60 out of the top 100 developers already stopped lands purchases.

“The land market is the harbinger of the property market, and a stable land market can boost the confidence of all market players,” Lu said, “As new property projects are expected to be put into the market after the city return to normal, the confidence will be back soon.”

Editors: Tang Shihua, Futura Costaglione

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Keywords:   Land Auction,Supply and Demand,Property Market,Shanghai