Administrative restrictions and monetary tightening measures don't appear to have undermined the enthusiasm of property developers' for lavish land purchases.
A new local record was established during a bid for a plot on the city's Chongming Island, smashing the previous record on the island, which was set just two weeks before.
Five pieces of land with an aggregate area of 230,000 square meters (sq m) sold at auction on Saturday for 2.37 billion yuan ($359.55 million). Among them, one plot located on Chongming Island, and designated for residential properties, sold for one billion yuan, more than 115 percent the initial bidding price.
Two weeks ago, a similar plot on the island was auctioned at 772 million yuan, or 6,073.5 yuan per sq m of gross floor area, by the Shanghai-based property developer Greenland Group. At the time the sale was a record for both total land price and for a single square meter of gross floor area.
According to Fu Qi, director of the Shanghai division of the China Real Estate Information Corporation, the unit price of 6,450 yuan was reasonable because the residential property price in a neighboring area had risen to 12,000 yuan per sq m.
"Land price accounts for about 50 percent of the cost of a newly built residential property, so the developer can still make a profit from this aggressive bidding
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