‘Land Kings’ Reemerge in Major Chinese Cities (AI Translation)

【周刊提前读】核心城市再现“地王” 提振预期还需持续发力

In Chengdu, Sichuan province, the record for residential land prices changed hands twice in March 2025. On March 11, a plot in the High-tech Zone sold for 31,700 yuan ($4,400) per square meter after over 130 bids, breaking a six-month record. Just two weeks later, a new high was achieved: 41,200 yuan/square meter for land in Jinjiang District, with a premium rate of 106%—reflecting strong demand in core cities [para. 1][para. 2]. Similar record land prices appeared in at least 26 parcels across Beijing, Shanghai, Shenzhen, Hangzhou, and Chengdu in the first quarter, according to Huatai Securities [para. 3]. Prime plots are small (under 100,000 sqm), with low plot ratios and starting prices below 10 billion yuan, suiting upgrade-oriented housing and developer preferences for manageable, profitable projects [para. 4].

Industry observers link these heated land auctions—termed “land king” deals—to stricter government oversight, partially rebounding developer confidence, and improved market expectations following an array of policy supports in late 2024 and early 2025. Central authorities have emphasized stabilizing property and stock markets at Politburo and National People’s Congress meetings, and local governments have rolled out measures to support developers and encourage sales, leading to early signs of recovery in property transaction volume [para. 5][para. 6][para. 7][para. 8]. Major cities’ land auctions reflect this upward trend, but third- and fourth-tier cities continue struggling with excess housing inventory and contracting land supply [para. 9][para. 10].

Hangzhou exemplifies this aggressive pace: it released nine batches of residential land for sale in early 2025, offering more than 760,000 sqm compared to just 156,400 sqm in early 2024 [para. 19][para. 20]. Shanghai, similarly, front-loaded supply of rare premium parcels, while Shenzhen has had to rezone commercial land due to lack of available residential lots in central districts [25–29]. As a result, first-quarter residential land revenues in Hangzhou hit 59.6 billion yuan—a 149% annual increase—while nationwide, land sale revenues continue to decline, down 15.9% year-on-year to 684.9 billion yuan in Q1 2025 [para. 31][para. 33]. Developers concentrate resources in key cities, where competition and potential for sales remain highest.

Premium land auctions have become fiercely contested, with record per-square-meter prices in top-tier and strong second-tier cities like Beijing and Hangzhou (e.g., 88,000 yuan/sqm in Hangzhou’s Xihu District, 102,300 yuan/sqm in Beijing’s Haidian) [35–39]. Yet developers remain cautious, prioritizing cash reserves and carefully evaluating each acquisition, as enforced by past painful losses—such as Vanke’s near-50 billion yuan annual loss resulting from aggressive land buys during the 2021 supply peak [63–65]. State-owned developers also now focus on core cities and restrict expansion to avoid repeating costly mistakes [52–54].

While premium land offers theoretically strong profit margins (new high-priced plots are on average 30% below local new home prices), recovery is spotty. First- and second-tier cities see double-digit premium rates on auctions, versus only 3.6% in third- and fourth-tiers [43–47]. Policy supports—scrapping home price caps and loosening plot ratios—help, but true market recovery depends on sustained sales and economic stability [59–60].

Pessimists warn the rebound in land auctions is limited to top-tier markets and that systemic risks remain; a surge in land prices may quickly become unsustainable if not coupled with genuine sales growth [78–80]. Central government policy, including efforts to incentivize conversions of unsold inventory via affordable housing and government purchases, seeks to maintain confidence and avert a deeper slump [96–101]. Analysts stress that robust, coordinated policy—and a focus on both “ensuring survival” and long-term strategic land investment—are vital for the sector’s continued stabilization and contribution to the broader macroeconomy [122–127].