China’s real estate sector is displaying tentative signs of revival as premium land sales in key urban centers suggest renewed developer confidence. Recent bidding wars for prime locations indicate shifting market dynamics, with major cities reporting land premiums reaching multi-year highs after local authorities eased price restrictions earlier this year.
Industry data reveals land premiums in 22 major Chinese cities have consistently exceeded 20% for four straight months, a significant jump from the 5-10% range observed earlier. Notable transactions include a Nanjing plot in the Hexi district fetching a 43% premium, the highest since 2020, while Hangzhou saw a private developer pay 5.2 billion yuan for land with nearly 70% markup. These developments mark a stark contrast to the pandemic-era slump when price caps and weak demand stifled auction activity.
Market analysts interpret these trends as early indicators of sector stabilization, though structural challenges persist. Research director Ma Qianli notes the rebound in land transactions has boosted market sentiment, with potential for broader recovery later in 2025 if current momentum continues. The improvement comes after years of downturn triggered by credit tightening and buyer hesitancy, which severely impacted local government revenues traditionally dependent on land sales.
While the recent uptick offers cautious optimism, the market’s full recovery remains contingent on sustained demand and developer financial health. The combination of relaxed regulations and urban renewal projects could gradually restore stability to China’s crucial property sector, though the path forward may still face obstacles from lingering economic uncertainties.