Beijing sees new high-price land bid

BEIJING -- Beijing on Tuesday saw a new high-price land plot auctioned at a price of 2.63 billion yuan ($413.17 million).

Beijing Hehuahengrui Real Estate Co Ltd won the auction on the Wanliu residential land plot in Beijing's Haidian district, said the Beijing Land Reserve Center, a government body in charge of public land management.

The total area of the Wanliu residential land plot is 38,869 square meters.

The company said it will build new residential buildings for residents who previously lived in the area.

Major Chinese real estate companies, such as Vanke and Poly, attended the auction for the Wanliu land plot, which is located between the third and fourth ring roads in western Beijing.

The land plot is the last one available for residential property development in the Wanliu region, where second-hand housing typically sells for 60,000 yuan per square meter.

"Therefore, it is not so strange to see high bids for the plot," said Zhang Dawei, a property market analyst with Centaline Property.

The high bid will definitely affect real estate prices in Wanliu and other areas nearby, he said.

"In spite of this, it is not of great significance for the city's overall land market, as it is still an individual case in a special region," said Zhang.

The domestic real estate market has yet to see comprehensive recovery, said Tian Feng, deputy director of the Beijing Land Reserve Center, adding that the high bid for the Wanliu plot does not reflect overall market conditions.

Beijing's real estate market has cooled down since regulations were tightened in 2010 to cool the sector down. The government implemented differentiated credit and tax policies, restricted purchases of second or third homes in some cities and launched massive subsidized housing projects for low-income residents.

Premier Wen Jiabao said Saturday that the government will resolutely implement real estate market regulations and make it a long-term task to curb speculation in the sector.

He called for faster construction of affordable housing, saying that local authorities should facilitate land approvals and improve the quality of construction by inviting a variety of investors to participate.

In June, many first and second-tier cities saw new home sales reach a 17-month high, with prices climbing steadily.

China has vowed to build 36 million affordable housing units during the 2011-15 period in a bid to meet the demands of low-income families and cool the property market.