Revenues from sales of land by local government to real estate developers in 50 major cities amounted to RMB 3.67 trillion ($0.56 trillion) in the January-November period this year, up 20.8 percent year on year, hitting a new historical record, according to the research center of Centaline Group. The pace of growth was higher than the 17 percent year-on-year increase in the January-September period.
In particular, revenues from sales of land in Shanghai, Hangzhou and Guangzhou exceeded RMB 200 billion ($30.6 billion), while revenues in Beijing, Nanjing, Wuhan, Ningbo, Foshan, Suzhou, Chengdu and Chongqing exceeded RMB 100 billion ($15.3 billion).
Zhang Dawei, chief analyst of Centaline Group, said that the economic recovery and ample funds positively affected real estate developers’ willingness to acquire land. For instance, as previously reported by SteelOrbis, the average land premium rate (the difference between the highest bids paid by property developers and the initially asked prices for land) in November 1-27 this year bottomed up to 14.7 percent, 2.5 percentage points higher than in the previous month. The strong activity in the land sales market will likely contribute to a good performance of the real estate market, which will boost the demand for steel.
$1 = RMB 6.5405