Land sales in 7 cities including Shanghai, Guangzhou, Shenzhen and Tianjin exceeded the annual plan

Recently, the land sales of seven cities such as Shanghai, Guangzhou, Shenzhen, Tianjin and others have exceeded the annual plan, boosting the markets optimism.

With the acceleration of urbanization and the continuous improvement of peoples living standards, the sale of land for cities such as Shanghai, Guangzhou, Shenzhen, Tianjin and others has grown steadily. Since the start of the year, seven places have already sold a total of 22 tons of land, an increase of 1.5 times over the same period last year; in addition, land prices have grown significantly over last year.

Statistics show that Shanghai sold 105.12 hectares of land, an increase of 404% year-on-year, with transaction prices soaring by 324%. Shenzhen sold 91.06 hectares of land at an increase of 202% year-on-year, with land prices growing by 507%. Guangzhou sold 89.2 hectares of land at an increase of 335%, with land prices growing by 333%.

The rest of the seven cities, Tianjin, Xian, Suzhou and Hangzhou, all achieved good results in land sales in March, driving up the markets optimism.

Experts think that the strong land sales reflect the strong municipal regulation power of the cities and the vitality of the local real estate market.

Behind the good land sales, the demand for property has obviously increased, and the local real estate market is also recovering.

Statistics show that the house prices of cities like Shenzhen, Guangzhou and Shanghai have been rising for the past few months; in addition, the increase in house prices has made the expectations of investors more reasonable, leading to higher demands for real estate in these cities.

The continuous increase in land sales also reflects the strong fiscal and taxation incentives of the Central Government. It is worth noting that, in order to promote the healthy development of the economy, the Ministry of Finance and the State Administration of Taxation have proposed a series of policies this year, such as the introduction of property tax and the reduction in taxes related to the transfer of housing, aimed at promoting the real estate market.

In addition, the low interest rate environment has created a favorable environment for the growth in demand for housing, especially among first-time buyers.

Looking forward, land sales in seven cities like Shanghai, Guangzhou, Shenzhen, Tianjin and others are likely to remain strong in the future. Experts predict that as long as the government maintains its support measures and the property market remains healthy, land sales are likely to remain strong over the next year.

Recently, seven cities including Shanghai, Guangzhou, Shenzhen, and Tianjing have exceeded the annual land sale plan. This indicates that the some of the largest Chinese cities have an increasing demand for urban planning, which has attracted more and more real estate investors to these big cities.

In December 2019, the seven cities had a combined land supply of 1,112.23 hectares, a total of ten times the 1,067 hectares for the same period in 2018, with sales of RMB 140.400 billion, an increase of 59.4% over the same period in 2018. In Shenzhen, the average land price continues to hit new highs, with an average of over RMB6,100 per square meter. This shows that the large cities are still favored by the investors.

China’s real estate market has seen a turnaround, thanks to a mix of factors such as tax cuts, favorable finance policies, and decreasing borrowing costs prompt investors to take advantage and invest into the real estate sector. The unprecedented land sale shows that large cities are becoming the hotspots of the real estate market, while smaller cities are losing their appeal.

In addition to the booming real estate market, these cities also benefit from the infrastructure development and the expansion of the transportation. Though cities like Shenzhen, Shanghai, and Tianjing are already quite saturated, the prosperous local economy and well-developed infrastructures are still attractive to many investors.

It is possible that other smaller cities can also become popular investment destinations with the same set of policies, investment incentives, and tax regulations. With the increasing demand for land, it is also likely that several cities in China will continue to outpace their annual land sales goals in the future.