Shanghai land sold at record high price despite curbs

BEIJING (REUTERS) - Authorities in Shanghai on Wednesday sold a land parcel for 4.6 billion yuan - a record high in the country's financial hub, state radio reported, despite the government's intensified efforts to cool down the real estate market.

The land was sold at a floor space cost of 29,918 yuan per square metre, up 57 per cent from the minimum price set at the start of the auction.

China launched fresh tightening measures in March, including higher down payment and the collection of a 20 per cent capital gains tax, to curb property speculation and rein in housing inflation.

However, strong sales performance and successful debt issuance in Hong Kong earlier this year have enabled some developers to buy new land lots, particularly in downtown areas where new supply has been scarce like this one in Shanghai.

Land prices keep rising as housing inflation nationwide accelerated to its fastest pace in April in two years, even as the broader economy is losing some steam.

The latest Reuters poll predicted an 8 per cent rise in China's house prices this year, propelled by loose monetary policy and strong pent-up housing demand.