Apr 12, 2019 (China Knowledge) - Chinese developers have increased their appetites from acquiring land at auctions in the country’s second-tier cities buoyed by improved financing conditions and stronger market outlook.
Average land auction premium over the starting bidding price in 300 major Chinese cities rose to 23.7% in March this year, compared to a premium of 10% in February. For second-tier cities, the average land auction premium reach 24% in March.
Land sales are an important indicator of the performance of the Chinese property market and the increasing demand and prices suggests a recovery in the country’s property market. The main reason for this improving sentiment is improving liquidity in the Chinese housing market, relieving the cash flow pressures faced by developers for much of last year.
This year, China’s onshore bond market also reopened for developers after a period of austerity with 40 Chinese developers raising a combined RMB 102.4 billion in onshore debt during March this year.
In addition, Chinese developers were also active in the offshore bond market this year, raising about USD 20 billion worth of high-yield bonds in the first quarter, doubling the fundraising during the same period last year.
Most of the activity in China’s property market focuses around the country’s second-tier cities as prices in third and fourth-tier cities cooling this year and activity in the country’s first-tier cities low due to the limited land supply.
Copyright © 2018 www.chinaknowledge.com
Send feedback or comments to: email@example.com
For more news, financial weekly reports, business guides to China and other premium information, subscribe to China Knowledge today: www.chinaknowledge.com
To access our page on Bloomberg, type CKFI