Land Prices Cool in China

Price cuts of ¥2000 to ¥5000/sqm are typical across China. Only Beijing is below 10 months supply among first-tier cities, Shanghai, Shenzhen and Guangzhou are all over 10 months. Second-tier cities such as Wuhan, Tianjin and Xian have less than 20 months supply, while Beihai and Hangzhou are above 20 months supply.

This oversupply is hitting land sales (which account for the majority of local government revenue in many cases). Through March 25, there were only ¥8.45 billion in first-tier city land sales versus ¥32 billion at the same point in 2013. Developers aren't willing to pay big premiums to grab land with prices cooling.

楼市供应过剩风险加大 3月土地市场遇冷

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