Land prices reflect confidence
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Two Shanghai land plots for residential use sold for total of 1.66 billion yuan (US$252 million) at auction at the weekend.
The high prices for the plots in Chongming and Jinqiao were an indication that property firms remain confident about the market despite government measures to rein in house prices, analysts said.
"Property developers have their own understanding of the house market. They are still confident," said Gong Min, an analyst with Centaline China Property Research.
Shanghai-based Jingrui Property Group won the site in Jinqiao District with a bid of 661 million yuan, a 47 percent premium over the starting price. That equates to a floor price of 21,323 yuan per square meter, close to the price for nearby new houses.
The plot in Chongming, meanwhile, sold for 1 billion yuan, a premium of 115 percent. The buyer's name was not made available.
The Chongming transaction will have to be reported to the nation's top land authority under the latest rules aimed at putting a brake on soaring land prices.
Local authorities should report land that has been sold for a premium of more than 50 percent to the Ministry of Land and Resources within two working days after the closure of the deal, the ministry said recently.
Jingrui, founded in 1993, was developing 14 projects in eight cities including Shanghai, Suzhou and Tianjing with a land reservation over 3 million square meters until 2009, according to the company's website.
The government's tightening policies include an increase in the down payment for second-home buyers, suspension of third-home purchases, property tax trials in Chongqing and Shanghai and interest rate rises.
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