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Bloomberg
Homebuilder Sunac China Holdings Ltd. has temporarily stopped buying land from government auctions in China because prices surged amid a housing rebound, Chairman Sun Hongbin said.
“We’ve suspended all bidding recently and didn’t even sign up†for auctions by local governments, Sun said at a briefing. “I feel the risk is too high,†he said without giving a time frame for the suspension.
Land costs in some of the biggest cities have surged, prompting developers to engage in heated competition to win auctions. City officials in Suzhou, a 30-minute train ride from Shanghai, last month terminated some land auctions after bidding reached levels more than double initial asking prices. The cost of buying land in prime markets is now higher than what an average home sells for, while in second-tier cities it’s almost half, according to Deutsche Bank AG analysts led by Tony Tsang.
Sunac, already among China’s most active real estate buyers this year, is in talks to acquire more land from other developers as prices at auctions have risen to “absurd†levels, Sun said.