Failing land auctions hint at developers' lack of cash

Land auctions in China’s lower-tier cities are failing or generating lower transaction prices, a sign that monetary and property tightening measures have left developers short of cash, The Wall Street Journal reported. In a November 2 auction in Jinan, for example, nine of the 11 plots of land put up for auction fell through because there were no bids; the remaining two were sold at a low price, the state-owned Xinhua News Agency reported on Monday. In Chengdu, bids for two of five plots put up at a recent auction fell through, Xinhua said. Of the 16 plots put up for auction in October in Nanjing, seven transacted at low prices, another seven auctions were delayed and one fell through. In recent months, housing transactions have fallen month-on-month or week-on-week in some cities, and developers have begun offering discounts for some projects in major cities like Beijing, Shanghai and Shenzhen.