The proportion of land withdrawn in the first round of auctions between February and June 2022 across 20 major Chinese cities has increased, as per SCMP. Known as the auction scrapping rate, this figure stood at 17%, up from 6.5% during the same period last year. Analysts notes that the uncertainty in the housing market coupled with difficulty to repay debt have kept developers from spending cash in land auctions. Property research firm 58 Anjuke said that developers were only willing to pay slightly higher than reserve prices ‘with the premium rate at 5%, falling short of the 24% last year’. Data from China Real Estate Information Corporation (CRIC) reveals that 60 of the 100 top developers in China have not bought a single piece of land in the first five months of this year. They add that total spend on land purchases among them was at RMB 468bn ($69.5bn) through May, down 65% YoY. Sectoral woes only continue to persist in 2022 with a revival now looking less likely.
Separately, property developer Sino-Ocean Group sold a commercial property project in Beijing to Ping An Life for RMB 5.02bn ($740mn), after having initially developed the project jointly. Sino-Ocean’s dollar bonds had fallen over 10% yesterday before the above update was made.