'Land auctions delayed over Congress'

By Wang Chao (China Daily)
Updated: 2010-03-10 09:13

The auctions of six large lots of land have been postponed for a week until March 15, with bidders angry over what experts claim is to avoid catch too much attention at the Two Sessions.

Among the six pieces, two slots - Yizhuang in Daxing district and Dongsheng in Haidian district - will be set aside for commercial use.

The other four pieces are to be used for residential projects, according to the website for the Land Consolidation Reserve Center in Beijing.

The center gave the official reason for postponement as excessive auctioning of land on the planned date of March 8.

However, Miller Lee, a real estate financial expert at a Beijing-based consulting company, told METRO on Tuesday the actual reason was the on-going annual National People's Congress (NPC) and Chinese People's Political Consultative Conference sessions.

The annual conference is currently in session and the real estate industry is an obvious area of focus.

"If another record-high land sale occurs during the conference, it would be deeply embarrassing for those involved," Lee said.

"Since most of the land for auction is intended for residential use, it is a sensitive issue," he added.

Experts argued however that the auction delay would have little impact on market prices.

"The policy from the NPC is not clear yet, so we just need to wait until after the conference to see," Li Wenjie, general manager of property agency Centaline China (North China region), said on Tuesday.

"The number of available houses in Beijing has dropped to below 90,000 now, which is a huge stimulus for real estate developers to buy up land," Zhang Dawei, director of the research department at Centaline China, said on Tuesday.

"There will be fierce competition on March 15," Zhang predicted.

Fifteen bidders are already in the queue to bid for one residential piece of land in Changping district, with the starting bid set at 2.675 billion yuan.

Dealing with such large amounts of money, some real estate companies are naturally angry about the recent date change.

Ren Zhiqiang, CEO of Huayuan real estate company, described his feelings on his Sina micro-blog account on March 8.

"We have wasted one week's interest on the margin we paid to the government. Are they going to return this money to us?" he asked.

As many as 46 pieces of land have already been auctioned in the city this year, statistics show.

Among them, the average land value for residences hit 10,187 yuan per sq m. Those for commercial purposes were lower at 3,895 yuan, according to Centaline China.

"Residential land prices are much higher than commercial land, which is different to other countries," said Zhang.