China land price gains slow in nearly two years

BEIJING: China’s residential land price gains slowed for the first time in nearly two years in the first quarter, and are likely to slow further in the second quarter, the land ministry said yesterday, another indication the property market is losing steam.

The average price of land for residential homes rose 2.1% to 5,139 yuan (RM2,681) per sq m in 105 major cities in the first quarter from the previous quarter, according to a report released by the China Land Surveying and Planning Institute, a research unit under the ministry.

That marks a slowdown from a gain of 2.6% in the fourth quarter of 2013 and the first easing since the second quarter of 2012.

The slowdown, a prelude to easing home prices, adds to evidence that China’s red-hot property market has lost some steam since late 2013 as local governments tightened controls on speculative buying, and as banks made it harder for home buyers and small developers to get loans.

The institute said the easing trend is likely to be sustained in the second quarter as the broader economy still faces “relatively big” downward pressures.

“Land prices will probably stop rising or begin to drop in some cities in the second quarter,” it said in the report on its website, www.landvalue.com.cn.


This article first appeared in The Edge Financial Daily, on April 16, 2014.