Statistics from the mainland’s Centaline Property Research Center show that by the end of the first quarter of this year on March 31, the revenue from land sales in the mainland’s 50 cities reached 702.099 billion yuan (RMB, same below), a 26% increase year-on-year, setting a new historical record.
According to CNN News, among these 50 cities, Shanghai ranked first with more than 90 billion yuan in revenue from land sales; Hangzhou ranked second with more than 70 billion yuan; and Guangzhou ranked third with more than 30 billion yuan in revenue from land sales. The revenue from land sales in Wuxi was the fastest growing, with a year-on-year increase of 5292.97%.
The data shows that 21 cities had revenues of more than 10 billion yuan from land sales, including Shanghai, Hangzhou, Guangzhou, Beijing, Chengdu, Ningbo, Wuhan, Nanjing, Suzhou, Zhengzhou, Dongguan, Wenzhou, Tianjin, Xi’an, Changsha, Shaoxing, Fuzhou, Wuxi, Nantong, Foshan and Chongqing.
Centaline Property Research Center statistics show that 12 real estate enterprises took more than 10 billion in the first quarter. Among them, Greentown China, Poly Development, C&D, China Merchants, Sunac China, Vanke land acquisition are over 20 billion. China Resources Land, overseas development, Greenland Holdings, Binjiang property, Beyoncé, New Town Holdings land acquisition amount is more than 10 billion.
In this regard, Zhang Dawei, chief analyst of Centaline Property, said that, on the whole, the news of selling land 3 times a year gradually began to affect the land market, and the supply of land market around the month of March decreased, and it is expected that April may be a blowout, but land prices are still high.
According to Shell Research Institute, the land side of the “two concentrations” (centralized announcement of land sale and centralized organization of land sale activities) in 22 cities to speed up the landing speed, the impact on the market is more far-reaching. In the next step, the impetus for the overall sharp rise of the land market in hot cities will tend to weaken.
For real estate enterprises to take land in a big way, Zhang Dawei believes that at the beginning of 2021, the overall real estate enterprises to take land is still active, especially the financing difficulty is reduced, the funds are relatively loose, the enthusiasm of real estate enterprises to take land gradually increased, many places again appear high premium rate land transactions, the plague on the capital chain of real estate enterprises, although the impact is large, but the mainland financing difficulty is reduced, some enterprises to take land enthusiasm again appeared to improve.
Data from the China Index Research Institute shows that in March 2021, compared with overseas debt, real estate enterprises more often issue domestic credit bonds for market financing. Specifically, the issue size of real estate credit bonds in March was 71.441 billion yuan, a significant increase compared with 19.071 billion yuan in February. In terms of financing costs, credit bond financing costs fell, with the average interest rate of credit bonds at 4.51%, down 0.81 percentage points from a year earlier.
For the mainland’s record high revenue from land sales, commentator Wen Xiaogang said it seems contradictory to the Chinese Communist Party’s recent tightening of regulation on the property market. In the first two months of this year, 87 property market regulation and control measures were introduced across the mainland, and the CCP’s Banking and Insurance Regulatory Commission, Ministry of Housing and Construction and Central Bank jointly issued a document in late March to prevent the illegal flow of business loans into the property market, and Shenzhen has already recovered more than $50 million in funds that entered the property market illegally. All these show that the mainland wants to cool down the property market, but from the perspective of the land market, the CCP’s move seems to be ineffective, and on April 1, the 100-city house price index released by the China Index Research Institute on April 1 showed that the average price of new residential units in March increased year-on-year to 4.07%; the average price of second-hand residential units also increased year-on-year and year-on-year compared with the previous month. The Chinese Communist Party’s regulation and control of the property market is still thunder but little effect, and the Chinese Communist Party has relaxed the financing difficulties of real estate enterprises, the cost of financing for real estate enterprises has fallen, showing that the Chinese Communist Party authorities are behind the real estate on the mainland.
Wen Xiaogang said at the same time, the mainland land sales revenue hit a new record also from an aspect of the mainland economy is not good, the authorities around the income reduction, or to rely on land finance to enrich.
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