Land sales still robust in Shanghai

By Cherry Cao | July 1, 2016, Friday |

Online Edition

LAND sales exceeded 50 billion yuan (US$7.5 billion) in Shanghai in the first half of this year with half of the plots fetching more than twice their reserve price, latest market data suggest.

Between January and June, 30 land parcels covering a total site area of 1.28 million square meters were sold across the city for a combined 50.6 billion yuan, a year-over-year decrease of 10.4 percent by value, Shanghai Homelink Real Estate Agency Co said in a report released today.

"Despite the drop, the city's land market remained red-hot in the first six months as developers showed extremely robust appetite for residential plots in Shanghai despite their suburban locale," said Lu Qilin, director of research at Homelink. "Fifteen of the 30 plots sold during the six-month period managed to record a premium of more than 100 percent."

Two thirds of the 30 plots were designated for pure residential development purpose and the average premium for these 20 parcels stood at 158.2 percent. That, however, compared to an average premium of 17.9 percent registered for land sites designated for office and commercial uses during the same period.

"It's pretty common to see land price exceed home cost in the neighborhood these days as developers, in the long-term, remained very upbeat in first-tier cities like Shanghai where land supply always seems to be inadequate," Lu said. "In order to make a fair profit, developers have to build medium- to high-end projects on these costly sites even though many of them are located in outlying areas and that would probably mean continuously-rising home prices in the city."

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Land sales still robust in Shanghai

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