Strength in commodity housing fuels rise in Shanghai land sales

The volume and value of Shanghai land sales increased in the first four months of this year due to a rise in commodity housing plot transactions, an industry report showed.

Land parcels totaling 3.6 million square meters, including those designated for affordable housing purposes, were sold in the city between January and April, a year-on-year rise of 24.6 percent. The total value of these plots was 57.32 billion yuan (US$9.25 billion), an annual surge of 75 percent, Soufun.com, operator of the country's largest real estate website, said in a report released today.

"Sales of land for commodity housing more than doubled in the first four months while those designated for affordable housing and commercial purposes remained rather flat from the same period a year earlier," said Li Zongzhou, a Soufun analyst. "However, sentiment in the land market, particularly in the commercial segment, has eased significantly month by month since the beginning of this year."

The purchases of parcels designated for commodity housing, affordable housing and commercial purposes totaled 1.89 million square meters, 958,000 square meters and 758,000 square meters, respectively, in the first four months, according to Soufun data. That compared to 820,000 square meters, 1.12 million square meters and 946,000 square meters recorded in the same period a year ago.

Th trend will probably continue for at least one more month as a sharp drop in new land supply is expected this month.

Only four plots of land totaling 95,000 square meters, excluding those designated for affordable housing, are set to be sold this month, a dive of 73 percent from April or an annual drop of 77 percent. Starting prices for the four plots stand at 3.18 billion yuan, a month-on-month decline of 36.5 percent and a year-on-year plunge of 73 percent, according to Soufun.