Frothy land bids return to top-tier cities

With housing prices in China’s larger cities again rising rapidly, frothy bids for land parcels are back. On June 8, Logan Property Holdings Co. agreed to pay RMB 14.1bn ($2.14bn) for a piece of land in Shenzhen’s Guangming district, the largest-ever price tag in the southern Chinese city. According to The Wall Street Journal, moves to stimulate China’s slowing economy and to trim excess housing in smaller cities across the country—such as interest-rate cuts and eased mortgage rules—have fed into speculative demand for homes in top-tier cities. Average housing prices in 70 Chinese cities were about 5% higher in May than a year earlier, the fifth straight month of increases. In top-tier cities, prices were up 19% to 53%.