Developers Slash Spending on Land as Number of Unsold Homes Mounts

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Developers slashed land purchases in May with spending totaling 29.6 billion yuan, down from 63.3 billion yuan in April and 74% lower than the same month a year ago

Chinese developers further applied the brake on land acquisitions during the prolonged housing market downturn and government’s push to reduce housing stock.

During the first five months, the top 100 developers in China spent a total of 314.6 billion yuan ($43.4 billion) on land purchases, down 26.7% from the same period a year ago, according to data from the property research firm China Index Academy. The slowdown accelerated from a 9.5% drop in the first four months.

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Chinese developers spent 314.6 billion yuan on land in the first five months, down 26.7% year-on-year.
Inventory absorption for new residential properties averaged 26.5 months by April's end.
Beijing introduced policies to stimulate the housing market, including scrapping the minimum mortgage rate and cutting down-payment ratios.

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What Happened When

January to May 2024：: Top 100 developers in China spent a total of 314.6 billion yuan on land purchases, down 26.7% from the same period a year ago.

Between January and May 2024：: Listing of all types of new land plots across China reduced 24.2% year-on-year. Supply of land for residential development decreased 38.6%.

First four months of 2024：: The slowdown in land purchases accelerated from a 9.5% drop.

April 2024：: The Ministry of Natural Resources urged local authorities to limit land sales for new residential development.

By the end of April 2024：: Inventory absorption period for new residential properties in China’s top 100 cities was 26.5 months.

May 2024：: Developers spent 29.6 billion yuan on land purchases, down from 63.3 billion yuan in April 2024 and 74% lower than the same month a year ago.

Last month (as of May 2024)：: Beijing policymakers introduced a policy package to bolster the housing market, including scrapping the nationwide minimum mortgage rate and cutting the minimum down-payment ratio, as well as incentives to help local authorities buy unsold homes.

AI generated, for reference only