BUSINESS

China’s Residential Land Sales Revenue Slumps 65% From Peak as State Backers Retreat

Published: Jan. 6, 2026 1:20 p.m. GMT+8

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Residential land transactions dropped 13.6% year-on-year to 620 million square meters in 2025. Photo: Bloomberg

China’s revenue from residential land sales fell about 65% in 2025 from its 2020 peak, as a prolonged property downturn forced even state-backed investment vehicles to scale back.

Data from the China Index Academy show that while the rate of decline narrowed slightly from the previous year, the contraction remains severe. The total planned gross floor area for all types of land sold across 300 cities fell 10.4% year-on-year to 2.46 billion square meters. Residential land transactions specifically dropped 13.6% to 620 million square meters.

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China’s residential land sales revenue fell about 65% in 2025 from its 2020 peak, with sales revenue dropping 11.4% year-on-year to 3.3 trillion yuan.
SOEs increased land spending by 20% in 2025, but overall market enthusiasm faded as average residential land premiums dropped significantly after Q1.
Local governments reduced residential land supply by 18.8% and are expected to maintain a “low volume, high quality” land strategy through 2026 and beyond.

AI generated, for reference only

Who’s Who

China Index Academy: The China Index Academy is a research institution that provides data and analysis on the Chinese real estate market. The article cites their data on residential land sales, gross floor area, land sales revenue, and residential land premium rates across various cities in China.

CRIC: CRIC (克而瑞地产研究) is a real estate information and service provider. The company reported that in 2025, while 41 LGFVs were among the top 100 land purchasers, their total spending decreased by 15% year-on-year, and their share of acquisition value dropped by 5 percentage points to 15%. Additionally, CRIC data showed that 14 major SOEs increased their land spending by 20% in 2025, accounting for 50% of the total value. They also predict continued low developer willingness to acquire land in 2026.

AI generated, for reference only

What Happened When

2020：: China's revenue from residential land sales peaked.

2021：: Sector’s liquidity crisis erupted; private developers largely vanished from land auctions. Land-acquisition-to-sales ratio for the top 100 developers last reached 29%.

2024：: Rate of decline in land sale revenue began to narrow slightly compared to previous year. SOEs reduced land acquisition before increasing it in 2025. Stimulus policies were announced in September 2024.

September 2024：: Stimulus policies announced.

Start of 2025：: Brief market stabilization in core cities coincided with the beginning of the year.

First quarter of 2025：: Developers acquired land to ensure project launches; average premium rate for residential land in 300 cities reached 13.4%.

First half of 2025：: Brief reappearance of “land kings” — buyers paying record premiums — in major cities.

Mid-2025：: Market enthusiasm faded and premium rates declined.

2025：: China’s revenue from residential land sales fell about 65% from its 2020 peak; planned gross floor area for all land sold dropped 10.4% year-on-year; residential land transactions dropped 13.6%; residential land supply fell 18.8%; average floor price rose 3.4%; SOEs increased land spending by 20%, accounting for 50% of total value; land-acquisition-to-sales ratio for top 100 developers returned to 29%; LGFV support for the market eroded; average premium rate for residential land sequentially dropped to 2.1% in the last three quarters.

First 11 months of 2025：: Revenue from state-owned land use rights transfers fell 10.7% year-on-year to roughly 2.91 trillion yuan; local government fund budget revenue dropped 5.5% to approximately 3.63 trillion yuan.

By 2026：: Real estate market expected to have the fundamentals to stabilize; land supply strategy predicted to be 'low volume, high quality' for about 3-4 years from 2026.