China’s Shift to Completed-Home Sales Cools Land Market

China’s sweeping policy shift to end the presale of uncompleted homes has immediately chilled the country’s land market, driving down auction premiums and forcing developers to abruptly scale back acquisitions.

Following Beijing’s Aug. 28 directive to transition away from housing presales, land transaction volume across 70 major cities plummeted 36% in a single week, while average auction premiums hit a one-month low. State-backed builders, the primary remaining buyers, are now targeting only small, low-density parcels that require less upfront capital and can be developed quickly.