By Hu Xinran and Han Jing
Real estate giants have been more cautious of land auctions recently, as the nation’s tightening restrictions on the housing market is slowing down the pace of land purchases.
This year, small and medium-sized property companies are more involved in these land acquisitions. Prominent businessmen of large companies, like the chairman of Greentown Real Estate Group Song Weiping, the manager of Binjiang Real Estate Group Zhu Huiming and the vice-president of Dexin Real Estate Group Fei Zhongmin, rarely make appearances at such events nowadays.
There were only two large real estate companies among the list of the 15 city center residential land acquisitions, both in the forms of co-operative purchasing.
Zhu Lidong, vice-president of Binjiang Real Estate Group, said that the best time for buying Hangzhou land is yet to come and that Binjiang Group has not bought any land this year.
Yet Binjiang Group continues to have a successful year, as it has achieved 4.5 billion yuan ($704 million) in sales in the first half of this year, reaching 90 percent of its target. Zhu also indicated that last year, the sales volume of the group equaled the amount it paid for land auction. This year, they will plan to reduce their land auction payments to half of last year’s amount.
“We will also seek to buy land in second- and third-tier cities and in western China,” he said.
Song, the president of Greentown Group said that the company’s sales witnessed a slump this year, so “the worst is yet to come”.
The Dexin Group, which continues to experience a rapid growth, has also been cautious. In the first half of this year, Dexin had about 400,000 square meters of land in Haiyan, Deqing and Changxin, but has not purchased land in Hangzhou.
Fei, the company’s vice-president, indicated that the price of second and third-tier cities’ land is much lower than Hangzhou’s.
“The tightening of the real estate market started at the end of last year and now the policy is still there. For property companies with good cash flows, they may save money and turn to projects to cut down costs,” Fei said.
By June, the total land reserves of Greentown Group was more than 40.69 million square meters, enough for development for the next five or six years. For Binjiang Group, they also have vast areas of land to be developed, which is enough for the company to survive for another five years with an estimated sales volume of 15 billion yuan per year.
