Amount value

The amount and value of land bought by real estate developers fell in September

* Country Garden, Poly Developments and China Vanke all reported sharp year-over-year declines in area and volume this fall

* Land sales in premier cities fell in the first three quarters, while sales in small towns increased

(Beijing) – Several major Chinese real estate developers slowed down their land purchases significantly in September, with real estate insiders pointing to the tightening of corporate finances.

Hong Kong-listed County Garden Holdings Co. Ltd., China’s largest real estate developer by transaction value last year, purchased 4.23 million square meters (45.5 million square feet) of land in September, with a total value of 6.4 billion yuan ($ 924 million). Country Garden’s acreage and purchase value fell 58.8 percent and 79.3 percent, respectively, year-on-year, according to data from the China Index Academy real estate market research.

The amount of capital entering the real estate industry has declined, Wu Bijun, Country Garden’s chief financial officer, said at a briefing in August.

Country Garden isn’t the only developer to buy less land in recent months. In August and September, Poly Developments and Holdings Group Co. Ltd. and China Vanke Co. Ltd., two other major players in the real estate industry, also reported a similar drop in land deals. Poly spent 12.5 billion yuan to buy land in August and 96 billion yuan in September, down 51% and 85% year-on-year respectively. Vanke’s spending fell 61.4% in August and 72.9% in September.

A total of 2,332 plots of land, with a gross area of ​​around 97.3 million square meters, were available for sale in September, according to a report from the China Index Academy. This is an 8% drop year over year. A total of 1,950 plots were sold, down 13% from the same period last year.

However, the decline in land sales was not evenly distributed across the country. According to the China Index Academy, land sales in top-tier cities such as Beijing and Shanghai fell in the first three quarters, while those in small towns rose. From January to September, the value of land deals in first-tier cities fell 24%, while it increased 8% in second-tier cities and 37% in third and fourth-tier cities.

An executive at a real estate company who did not want to be named said many real estate companies had declared their intention to slow land purchases during their internal meetings. “In a way, it’s because of the cash flow pressure. In addition, many developers agree with real estate investors that they should buy more when prices go down, not when they go up, ”said the executive.

Contact reporter Liu Jiefei ([email protected])

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