Chinese property developer warns of rising land prices

The chairman of Shimao Property Holdings has warned of a possible real estate bubble, claiming that some development sites are being sold at excessively high prices, the South China Morning Post reported. Hui Wing-mau said that a 32,000 square-meter residential site in Beijing sold for US$149.4 million in late May, over 241% above the floor price. Guangzhou R&F won the site after 89 rounds of bidding. “It is getting worrisome to see the steep rise in land prices,” Hui said, noting that speculation in the land market could be a precursor to similar behavior in property markets. Analysts said that developers have started aggressively bidding for land again after two years of suspended land acquisitions. Many developers have seen their balance sheets boosted this year by surprisingly high sales and favorable lending policies enacted by the government.