BUSINESS

Chinese Developers Chase Premium Land as Broader Market Slumps

Published: Jul. 9, 2026 2:58 a.m. GMT+8

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Since the second quarter of 2026, land transaction activity in core cities has continued to rise, with high-premium land parcels emerging frequently. Photo: VCG

Chinese state-owned developers are igniting fierce bidding wars for prime land in top-tier cities, paying steep premiums to secure quality plots amid an ongoing national property slump.

In Hangzhou, state-backed Poly Developments and Holdings Group Co. Ltd. recently outbid over a dozen rivals to secure a residential parcel for 4.6 billion yuan ($677 million). The 27% premium resulted in the city’s second-highest unit price this year. Similar record-breaking land sales have swept through major hubs, including Shanghai and Shenzhen, since April as developers rush to replenish depleted land reserves.

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Explore the story in 30 seconds

State-owned developers pay high premiums for prime land in Hangzhou, Shanghai, and Shenzhen, with premiums reaching 27% and nearly 100%.
Nationwide residential land sales fell 24% in H1 2026, with average floor prices dropping 10%, showing a polarized market.
Luxury projects sell out quickly in core cities, but fierce bidding squeezes profitability, with margins likely below 10%.

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Who’s Who

Poly Developments and Holdings Group Co. Ltd.: Poly Developments and Holdings Group Co. Ltd., a Chinese state-owned developer, outbid rivals in Hangzhou for a residential plot at 4.6 billion yuan (27% premium) and acquired a Shenzhen plot for over 10 billion yuan—China's first residential plot above that threshold in 2026.

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What Happened When

2021：: The liquidity crisis occurred, which largely sidelined private builders and led to state-owned enterprises dominating land acquisitions.

Early 2026：: Municipalities tightened the supply of high-quality land, causing temporary inventory shortages.

March 2026：: Shenzhen delayed its first residential land auction of the year until this month.

April 2026：: Record-breaking land sales began sweeping through major hubs, including Shanghai and Shenzhen.

May 2026：: Local governments began releasing prime parcels just as developers faced a critical deadline to secure land for year-end sales.

June 2026：: Average land auction premiums in key Chinese cities climbed to 14%. Also this month, Shenzhen concentrated its supply of prime parcels, with three plots sold at premiums near 100%, generating over 29 billion yuan in first-half land revenue. One site set a new city record for unit price. Poly Developments and Holdings Group Co. Ltd. outbid over a dozen rivals in Hangzhou to secure a residential parcel for 4.6 billion yuan ($677 million) at a 27% premium, resulting in the city’s second-highest unit price in 2026. Additionally, Poly Developments acquired another plot in Shenzhen for more than 10 billion yuan, marking China’s first residential plot to exceed that threshold in 2026.