Chinese state-backed developers are starting to buy land at a premium again after the government eased limits on home prices to revive a slumping market that has been a drag on the economy for more than four years.
The number of land parcels that sold for at least 20 per cent above the asking price accounted for 37 per cent of deals in 2025 so far, according to a Bloomberg analysis of transactions worth at least one billion yuan (S$184 million) tracked by China Index Academy. That compares with just 14 per cent for all of 2024 and 4.6 per cent in 2023.
Seven out of the 10 transactions in 2025 involved state buyers, including China Resources Land, China Overseas Land & Investment, Poly Developments and Holdings Group, and mixed-ownership firm Greentown China Holdings.
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The renewed interest in land deals signals some state-backed developers are betting on an eventual rebound in the housing market, even as sales and prices continue to slide on weak consumer confidence. While not a full recovery, it is the latest sign that China’s property market is stabilising.
Local provinces are facing increased financial pressure due to dwindling land sales in recent years. Government revenue from these transactions plunged 16 per cent in 2024, worsening 2.8 percentage points compared with the previous year.
In response, more cities are encouraging land purchases by easing terms, including relaxing limits on how much profit developers can make selling new homes. Many cities scrapped price guidance in the second half of 2024 to encourage such moves.
“While the land market hasn’t shown a full turnaround, some cities are starting to see red-hot bidding over parcels,” said analyst Xie Yangchun at China Real Estate Information Corp. “That’s because stringent limits on home prices ended last year.”
To be sure, the number of land transactions worth more than one billion yuan is still below pre-downturn levels. Most of the land parcels sold are small, according to China Real Estate Information.
Source: Bloomberg
