Since July, the local auction market has been booming frequently. On the 25th, Poly Construction Engineering Consortium spent 8.9 billion yuan to bid for the "land king" in Haidian, Beijing, an increase of 3 billion yuan compared with the first transaction. On the 23rd, a piece of land in Hangzhou was sold at a high premium of nearly 60%, setting a record for the premium rate of land auctions in Hangzhou in recent years. Previously, land auctions in Chengdu, Wuhan and other places were also active, and the first recovery of land prices is expected to lead to the gradual improvement of the property market.
Soil shooting in many places is hot //
On July 25, after 5 rounds of bidding, Poly + Construction Engineering Consortium won the HD00-0401-0120, 0132 and 0162 plots of Yongfeng Industrial Base (New) H in Xibeiwang Town, Haidian District, Beijing at a price of 8.901 billion yuan, with a transaction amount of 8.901 billion yuan, a premium rate of 3.5%, a residential floor price of about 59,600 yuan/square meter, and a sales guidance price of 90,000 yuan/square meter.
This is the second sale of the parcel, which was previously sold for the first time in 2016 with a starting price of 4.4 billion yuan, and was won by Vanke at a price of 5.9 billion yuan, but due to the failure to promote the development and construction of the project, it was withdrawn by the Haidian government and re-entered the market. It can be seen that the transaction price increased by 3 billion yuan compared with the first transaction.
According to the website of the Beijing Municipal Planning and Natural Resources Commission, since July, five residential plots have been listed and transacted in Beijing, and another piece of land in Fangshan District is being traded. In July, the Beijing land auction market was actively sold.
(Screenshot from the website of the Beijing Municipal Planning and Natural Resources Commission)
On July 23, Hangzhou completed the transfer of the seventh batch of residential land in 2024. According to the listing announcement, the total land area of the two plots is about 69.18 acres, the total construction area is about 93,000 square meters, and the starting total price is about 2.287 billion yuan. In the end, after more than 40 rounds of quotations, the two plots were sold at a premium, with a total of 2.942 billion yuan. After 46 rounds of quotations, the bidder Hangzhou Greentown Zhechao Real Estate Co., Ltd. won the bid at a total price of 605.1 million yuan, which is converted into a floor price of about 22,287 yuan / square meter. Although the land plot is relatively remote, the final transaction premium rate reached 59.2%, setting a record for the premium rate of land auctions in Hangzhou in recent years.
On July 19, Chengdu ushered in the second local auction of the week. It is understood that a total of 5 residential land transactions were sold in this market, with a total transaction amount of 4.523 billion yuan, of which 2 were sold at a premium and 3 at a reserve price. In addition to the 4 residential land transactions in the first land auction on July 17, a total of 9 residential land transactions were carried out in two land auctions in Chengdu a week, with a total transaction value of about 10.353 billion yuan.
On July 18, two adjacent residential land parcels were sold in Qingshan District, Wuhan, of which plot P(2024) 036 is a pure residential building with a planned construction area of 44,400 square meters. The land was won by Qingshan Urban Renewal in Wuhan City at a reserve price of 777 million yuan, making it the land with the highest unit price in Qingshan District.
It can be seen that in July, land auctions in many popular big cities were active, and premium transactions were also frequent. This also means that the price of the plot will also rise in the future.
This year's land purchase fees continue to increase month-on-month //
In addition to the obvious activity of land auctions in the above-mentioned cities, it can also be seen from the continuous increase in land purchase fees paid by real estate companies across the country that the land auction market has improved significantly this year. From the perspective of the most recent year, Wind data shows that in the second half of 2023, the highest national land purchase fee will be 356.655 billion yuan in September, with a decrease in 5 months in 6 months. In the first half of 2024, the national land purchase fee exceeded 400 billion yuan in May, and climbed again to 452.269 billion yuan in June, a new high in more than a year. In addition, four of the five months in the first half of the year showed month-on-month growth (note: the data for February is the sum of the previous two months).
Commercial housing transactions have also picked up //
The real estate support policy has been in place for more than two months, and the policy effect has gradually emerged, and the property market transaction has improved significantly. Wind data shows that China's 20 large and medium-sized cities sold more than 90,000 units of commercial housing in June, a significant increase of 25.7% from 72,200 units in May, a new high in the year, which is also the second consecutive month of rebound.
House prices are gradually stopping falling //
In terms of prices, among the 70 large and medium-sized cities in June, the month-on-month decline in housing prices in all tiers of cities generally narrowed, the number of cities with a decline in housing prices decreased, and the number of cities with a month-on-month decline in the prices of new and second-hand houses decreased by 4 compared with the previous month.
It is worth noting that the month-on-month increase in the price of new houses in Shanghai has ranked first in the country for four consecutive months, and the prices of second-hand houses in Beijing and Shanghai have risen for the first time this year, and the second-hand housing prices in Shanghai have also led the country.
Industry insiders believe that with the implementation of a series of real estate policies issued by multiple departments in mid-May, the policy effect has appeared, and the property market in Beijing, Shanghai and other places has stabilized and warmed up in June, and it is expected that more hot cities will stabilize housing prices in July.
Price transmission or is happening //
The impact of land auction price increases on housing prices is a complex process, involving multiple links and factors, but there is a certain transmission mechanism:
Cost pass-through: When the price of land rises, the cost of purchasing land for developers naturally increases. These additional costs tend to be directly reflected in the cost of building the house and are eventually passed on to the consumer, leading to higher house prices.
Psychology of anticipation: Developers are willing to pay a higher price for land based on the expectation of future house price increases. Homebuyers may also rush to buy in anticipation of rising home prices, pushing up home prices.
Cost of capital: The rising cost of land may prompt developers to seek more financing, increasing their financial costs. Higher capital costs are also factored into the total cost of the project, which in turn affects the house price.
Return on investment expectations: Developers consider future ROI when purchasing land. To ensure an attractive return on investment for the project, they may set a higher sales price.
Review of historical articles
"Collective Action in the Property Market in Many Places", "Witness History", "Throughout the 50-year history of the Federal Reserve's interest rate cuts, this time is the most unusual", "Heavy shot", "Gold is bursting!" Global Market Carnival》
Enter the command in the Wind financial terminal
WBUY
Once you open an account, you can link the fund market with one click
Place bulk orders online and manage multiple accounts easily
Portfolio asset penetration management, real-time monitoring of underlying positions
Purpose-built for institutions
One-stop fund investment research, trading and management platform