BEIJING Aug 21 Authorities in China's capital
sold a plot of land at a record 7.46 billion yuan ($1.2 billion)
on Wednesday, despite analysts belief that a general downtrend
in the property market is worsening.
Located in the west of central Beijing, the plot was sold at
a price of 63,377 yuan per square meter, more than double the
bid submitted in the auction, data from the Beijing Land
Consolidation and Reserve Center showed.
The result was in stark contrast to the cooldown in China's
land and property market, which has been dampened by the effects
of slower economic growth and a near five-year government
campaign to temper fast-rising home prices.
Property sales and prices turned south this year, with new
home prices dropping in July for a third consecutive month,
official data showed.
Hit by the downturn, developers are no longer as well funded
as before and have become cautious when buying land. Some have
even given a cold shoulder to expensive state-owned land that is
up for sale.
"The high price premium for the plot was due mainly to its
unique location in the downtown area," said Zhang Xu, a property
analyst at a property consultancy, Home Link, in Beijing.
The land parcel, slated for commercial and residential use,
was first put on sale in February. But the auction was suspended
by authorities who feared prices may hit a record, creating an
awkward situation since the government was supposed to be
restraining the once-heated housing market.
Growth in China's land prices slowed for the first time in
nearly two years between April and June as the retreat in house
prices spread to the land market.
A Reuters poll in July of 15 analysts showed Chinese home
prices are likely to rise only 0.5 percent in 2014 as the
housing cooldown worsens.
(1 US dollar = 6.1472 Chinese yuan)
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Simon