China developers are buying land at up to a 20% premium – dipping a toe back in the market

February 24, 2025 at 02:58AM
China’s state-backed developers are ramping up land acquisitions at a premium, following government easing of home price restrictions to revive the struggling property market.

So far in 2025, 37% of land deals have been sold at 20% or more above asking price, compared to 14% in 2024 and just 4.6% in 2023, according to China Index Academy.

State-owned firms, including China Resources Land, China Overseas Land & Investment, and Poly Developments, were involved in seven of the ten biggest transactions.

While home prices and sales remain weak, the renewed land-buying signals growing confidence in a long-term recovery. However, land sales volumes remain below pre-crisis levels, with most transactions involving smaller parcels.

Local governments, struggling with falling land sale revenues, have relaxed restrictions to attract buyers. Many cities scrapped price caps on new homes last year, allowing developers greater profit margins. Beijing lifted home price limits for the first time in three years in November, while Shanghai and Hangzhou followed with similar policies.

Despite lingering market uncertainty, state-owned developers are leading the way, encouraged by government pledges to stabilize the real estate sector. With favorable policy shifts and renewed competition for prime land, China’s property market is showing early signs of stabilization.

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Info comes via Bloomberg reports, gated.

This article was written by Eamonn Sheridan at www.forexlive.com.