Knight Frank’s latest report, Yangtze River Delta Region Land Market Review, reveals that the land price, land supply and land transaction in Yangtze River Delta (YRD) rebounded in the second half of 2012 after a recessionary first half, led by cities with strong economic strength such as Shanghai, Nanjing, Suzhou, Hangzhou and Ningbo. The rebound was driven by urbanisation, eased financial pressure, developers’ eagerness in building future pipeline for projects, and the relatively low price level in the second half of 2012.
The land supply plummeted by 60% in the first half of 2012, and then rebounded back to the peak of 2011, led by a 94% increase in residential land supply in the second half. The transacted residential and commercial land areas increased 124.7% and 55.6% respectively compared with first half of the year. Transaction prices that were at least 10% above reserved price has increased sharply in the second half with the highest residential land price reaching RMB7,000 to 9,000 per sq m in Hangzhou and Ningbo. All the most expensive land in Hangzhou, Nanjing and Ningbo was transacted in the fourth quarter.
Land grant fees also show a sharp rebound, with RMB11.8 billion in the first half and RMB62.5 billion in the second half of 2012. Accommodation value decreased in most cities in 2012, but there was a clear rebound in the second half due to increasing demand and increasing transactions in prime locations. In 2012, state-owned enterprises played a major role in the primary land market, and large developers contributed 75% of the top 20 transactions in terms of total value. This trend is expected to continue in 2013.
Regina Yang, Director and Head of Research & Consultancy at Knight Frank Shanghai, forecasts, "Buoyant outlook for both the land and property markets will have positive impacts on the land market and it is anticipated that land transaction volumes and prices will maintain on an upward trend in 2013."