Economy

Residential land sales down 14% in Jan-May period

(Xinhua)
Updated: 2011-06-03 16:40

BEIJING - China's sales of land for residential development fell by 14 percent year on year during the first five months of this year, due to the country's efforts to cool its sizzling property market.

Land sales in 128 cities dropped 5 percent year on year to 665.9 billion yuan ($102.45 billion), while China's residential land sales decreased to 519.3 billion yuan, according to data from the CEBM Group Ltd, a Shanghai-based real estate investment advisory firm.

Land prices fell sharply in first-tier cities, with Beijing and Shanghai seeing their residential land sales plummet by 84 percent and 44 percent, respectively.

Shi Qi, an analyst with the CEBM Group, said China's tightening measures have cooled the runaway property market and also caused a slump in land prices, which is likely to build up pressure on fiscally stretched local governments, as land sales are a vital source of revenue for them.

The government previously pledged to dedicate 70 percent of its residential land to the development of subsidized public apartments and small- and medium-sized homes. These projects are expected to create 10 million affordable homes this year.

China adopted a series of tightening measures earlier this year, including raising minimum down payments for second-home purchases, limiting purchases of new homes and introducing property taxes, in order to keep housing prices down.