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Good news for home owners: increasing land prices should cause Tianjin home values to rise
Land prices continue to rise across China, with land sale revenues expected to achieve a record high, totaling over RMB 4 trillion in 2013. Tianjin land sales have also been buoyant. In the past year, Tianjin witnessed two record land deals. One of the land parcels set the mark for the highest total transaction price for a single site at RMB 10.3 billion, while the other transaction broke the record for the most expensive price per square meter at RMB 25,000 (GFA) for the buildable land. The latter price is already higher than the average price for the majority of high-end residential units in the city. These land price increases have been influenced by two factors: China’s control on international capital flows and the mounting debt that local governments are accumulating. Although land prices are no guaranteed indicator for the direction of home values, they are highly positively correlated, meaning that record breaking land deals of the past year should lead to higher home prices in the future.
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05 March 2014