Nov 28, 2018 (China Knowledge) - Land sales surged in Beijing after the local government allowed buyers to make a one-off deposit to participate in the bidding of all available sites. In addition, requirements that developers allocate 70% of total floor space for flats that are 90 square meters or smaller to ensure affordable homes was lifted for some sites.
Following this, the city recorded its highest single day sale of USD 4.5 billion on Monday. 12 out of the 13 sites put up for auction were sold that day. One of the sites was sold at a premium of nearly 50% over its starting price while the others sold at a premium of between zero to 26%.
Despite the record sales, some analysts remain bearish on the country's property markets citing continued weak demand from developers and credit crunch in the property market. According to the analysts, the record sales was due to relaxation of certain controls by the Beijing government; and the buyers who participated were mostly state-owned enterprises.
Only three out of the 14 successful bidders on Monday were private enterprises. In addition, previously active players such as China Vanke and China Evergrande were absent during the bidding. The Beijing government had made adjustments in the nature of the property developments and price cap to attract more buyers.
Despite this, Beijing still failed to meet its targeted 6.5 million square meters of land for private residential developments in 2018. The capital city has only managed to sell 2.25 million square meters of land this year.
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