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China's land prices see slower growth
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CNTV, January 4, 2012
After years of fierce demand and runaway prices, China's land market is finally starting to turn the corner.
Property developers are tightening their purse strings, with fewer land transactions and better deals. Analysts say, lower land prices could - eventually - have an impact on property prices.
According to a report released by the Ministry of Land and Resources, China's land prices for residential properties have seen slower quarter-on-quarter growth since the second quarter in 2011. Prices dropped to just over 4200 yuan per square meter in the fourth quarter last year. In some cities, land prices went into the negative.
Additionally, data shows average land prices in nine out of 13 major Chinese cities monitored have dipped over the past year. Among them, Chongqing saw the biggest decline, with land in the booming city losing more than 70 percent of its value.
Zhao Song, director of Land Price Division, China Land Surveying & Planning Institute said: "Since the first quarter of last year, growth of land prices has started to slow down. This downward trend will extend to the fourth quarter and the number of cities with negative land price growth will increase."
Meanwhile, land sales in 130 Chinese major cities dropped 13 percent year-on-year in 2011, according to the China Index Academy. Experts attribute the declines in land sales to a cooling property market under the government's tightening measures.
Zhang said: "I think the downward trend in land prices will continue in 2012."
Dong Liming, vice president of China Land Science Society said: "Overall, land prices will be worth around 25 to 30 percent of total housing costs. Therefore, these changes in land prices will have a big impact on property prices."
Furthermore, analysts say China's property prices are likely to continue to fall next year as the price of land becomes more affordable.
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