Land supply accelerates as year-end activity peaks and private developers are bringing momentum to the land market.
Photo from Tuchong
by Wang Yuhan
As the year ends, China’s property market is stabilizing under favorable policies, with land auctions gaining momentum and major cities accelerating land supply.
CRIC China estimates that December will see 380 million square meters of land reach transaction deadlines, the highest monthly total in 2024. In 24 key cities, 519 residential plots are set to be auctioned, with a combined starting price exceeding 250 billion yuan. This represents a surge 3.5 times the monthly average for the year, marking a significant peak despite the typical year-end increase in activity.
Cities facing higher inventory pressure, such as Wuhan, Changchun, and Wuxi, have shown stronger confidence in increasing land supply toward the end of the year. These cities, characterized by digestion cycles of over 20 months, are ramping up supply to alleviate pressure.
In contrast, cities with lower inventory pressure or consistent land demand, such as Beijing and Shanghai, have maintained steady supply patterns. For instance, Beijing approved the sale of land worth 13.2 billion yuan in December, about 60% of its average monthly transaction volume for 2024, while Shanghai’s planned sales are projected at 21.9 billion yuan, 1.7 times the same benchmark.
Zheshang Securities' analysis highlights two main reasons behind the rising activity in the land market. First, some major real estate companies, having maintained low investment intensity throughout the year, are now replenishing their land reserves. The land acquisition-to-sales ratio of the top 100 real estate companies fell to 0.16 in the first 11 months of 2024, down from 0.37 in 2020. Second, demand for high-quality plots is driving localized recoveries in transaction scale and premium rates.
Recent land acquisitions show that while state-owned and centrally administered enterprises continue to dominate, private developers are increasingly making their presence felt.
In the last two weeks, private developers have been particularly active in cities such as Hangzhou, Sanya, and Chengdu, where a surge in land auctions has been observed. Notably, in Hangzhou on December 19, a plot in Xiaoshan District sold for 1.8 billion yuan at a premium rate of 76.5%, the highest in the city this year.
Similarly, in Sanya on December 20, a residential plot measuring just over 32,600 square meters—a relatively small parcel—sold for 19,785 yuan per square meter at a premium rate of 59%, setting a new record for average price in the city.
An industry insider, speaking to Jiemian News, noted, “The fact that private enterprises are bidding at high premiums reflects their financial flexibility and growing confidence in the recovery of the property market, supported by recent favorable policies. This represents renewed hope for the market.”
Policy adjustments and refinements to construction regulations in cities like Hangzhou have further boosted developer enthusiasm. Hangzhou’s new regulations, effective December 13, 2024, revise the floor area ratio calculation. For example, enclosed balconies are now counted as half their area, open corridors are excluded, and parking spaces meeting minimum standards are not included in the calculation. These changes significantly reduce development costs for real estate companies.
More than 20 other cities, including Shenzhen, Guangzhou, Chengdu, and Guiyang, have introduced similar adjustments. Measures such as allowing special bonds to recover land, lowering plot ratios, and increasing expansion areas are all aimed at reducing costs and fostering market recovery.
