Two land parcels sold at reserve prices in Shanghai yesterday while a third one was bought at an 18.6 percent premium, reinforcing a "cold" start in the local land market amid continued government rein-in policies to curb speculation.
The three residential plots located in remote Jinshan District were the second batch of land sites released in Shanghai after the Spring Festival holiday.
Beijing Construction Engineering Group paid 1.44 billion yuan ($209 million), or an average gross floor area price of 11,627 yuan per square meter, for the 61,922-square-meter housing site in Binhai New City. The firm paid an 18.6 percent premium compared with its starting price of 9,800 yuan per square meter.
Shanghai Construction Group bought the 71,671-square-meter plot in Fengjing Town for an average GFA price of 9,800 yuan per square meter. A joint entity of Huafang Co and NHU Real Estate got the 48,549-square-meter site in the industrial zone, the smallest of the three, for an average GFA price of 9,500 yuan per square meter.
"The one in Binhai New City was the most popular among the three plots as seven developers competed in the auction, probably drawn by its walking distance to Metro Line 22 station as well as its moderate size," said Lu Wenxi, senior research manager at Shanghai Centaline Property Consultants Co.
As required by the land watchdog, 60 percent of the homes built on the site should be medium and small-sized apartments while 45 percent of the total space will be purchased by the government on completion for relocation purposes.
New homes in the neighborhood now sell for between 22,000 yuan and 25,000 yuan per square meter while pre-owned properties cost around 18,000 yuan per square meter, according to Centaline data.
Last Friday, three land plots for residential development in the city's outlying Lingang port area were also sold close to reserve prices.
