New real property evidence in Shanghai

chiny24.com 9 months ago

Another evidence on the real property marketplace fell in Shanghai. At the open auction, Greentown China Holdings Ltd. (chin. 绿城中国控股有限公司), a Hong Kong improvement company, acquired a construction game in the XuHui territory (chin. 徐汇) bidding for 131 1000 RMB (about 71 1000 PLN) per square metre of land.

In this way the 2016 evidence was broken, erstwhile RonXin Group (chin. 荣信集团) paid for the land in the Jingnan territory (chin. 静南) 100.000 RMB per square metre (approx. 54.240 PLN). The full game cost RMB 11 billion (about PLN 6 billion). Greentown, in turn, paid RMB 4.8 billion (about PLN 2.6 billion). The period between the 2 records is besides a time of immense changes in the Chinese real property market. In 2016, RonXin acquired land subject to many restrictions and orders, specified as this coercive developer to build on the premises of a pool of apartments intended for sale on preferential terms, or this limited area of apartments put into service. This made the land cost the developer yet more than today. That is due to the fact that present most of all kinds of restrictions are no longer valid. The other is the case: local authorities are trying to support the construction and housing sector in a variety of ways, which has been suffering from deconiture for respective years.

The site in the XuHui territory was sold in October 2021 to XiaoMi, which paid RMB 1.55 billion (about PLN 841 million). The Shanghai office of the company was to be established here. Then the company changed its plans, and the land returned in March this year to the resources of the city's land. This has been done in accordance with the law, according to which, the land transferred into the lease alternatively than managed for 2 consecutive years (the planned construction will not begin), returns to local authorities which regain the rights to usage the land.

The Shanghai evidence fell at a time erstwhile the Chinese real property marketplace is going through a very hard period. The national land supply in July fell by 42.6% to 24.04 million square metres, while their sales fell by 26.6% to 19.05 million square metres. In this respect, the marketplace remains low both in terms of supply and in terms of transaction scale, with crucial disparities in marketplace activity. These problems affect the largest Chinese cities to a lesser degree (Pekin, Shanghai, Shenzhen and Canton). Here on a steady level, the sale of costly apartments at premium locations remains. Shanghai is now the only city in China where housing prices have started to somewhat rise.

By way of derogation: The land in China is state-owned. The flat is the property of the acquirer. At auction, the developer acquires the right to lease perpetual land. Depending on the destination, this lease is fixed for different periods:

- for housing 70 years,
- under industry, education for 50 years,
- for tourism, trade, recreation sports 40 years.

When the perpetual lease expires, it can be renewed, it can besides be inherited. Land-trafficling charges are an highly crucial part of the budgets of local governments. Therefore, these governments are doing their best to revive the market. More land leases, more money in local cash. And those in many cities of China are empty. The debt of local governments is 1 of the most serious economical challenges facing China.

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