By Song Yao (宋尧)
Economic Observer Online
Nov 4, 2011
Translated by Zhu Na
Original Article: [Chinese]

The final three months of each year are normally one of the busiest times for land sales in China, but this year the number of transactions completed in October declined to a two year low, according to statistics covering 133 cities collected by the China Real Estate Index System (中国房地产指数系统).

The number of land transactions that were completed in October decreased by 40 percent when compared with the number of deals completed in September and were down 37 percent compared with the those finalized during the same period last year.

Residential land transactions fell most sharply, down 45 percent year-on-year, with the lowest number of completed transactions since January, 2010.

It hasn't simply been the number of completed transactions that has decreased sharply, the number of auctions at which bidding exceeded the asking price fell to an average of 3 percent, a huge drop from this time last year when 37 percent of auctions were seeing prices go beyond the asking price.

The first and especially last quarter of the year is traditionally the peak time of land trade in China, a time when developers ususally have more funds to invest. In some years, the trade in the last quarter can account for as much as half of all transactions made in a year.

According to the data, land supply is still ample and the decrease of land transactions is mainly due to a drop off in buyers who are under pressure from restrictions on borrowing and property purchases introduced by many local governments across the country earlier this year.

However, in some places like Beijing, policies aimed at promoting land transactions were introduced at the end of October, these included moves to reduce the size of deposit required on purchasing a plot of land and also increasing the length of time that developers were given to hand over payments.

Links and Sources
Soufun: 2011年10月全国133个城市土地市场交易情报