Key facts
- State-backed developers engaged in a 200-round bidding war for a prime Shanghai residential parcel on July 28, 2026.
- Poly Developments and China Resources Land won the Shanghai bid for 16.1 billion yuan ($2.4 billion), setting a record price per square meter.
- Record auction prices in Shanghai and Beijing are reviving hopes for property market stabilization, but the trend is confined to prime parcels.
- Nationally, residential land sales by area fell 22.7% year-on-year in the first seven months of 2026.
- State-backed developers accounted for 64% of tracked land spending in the first half of 2026.
- Local governments are curtailing land supply to manage inventory and support prices.
Frenzied bidding for prime residential land parcels has returned to China's top-tier cities, with state-backed developers paying record prices, sparking hopes of a property market bottom. On July 28, 2026, a consortium led by Poly Developments and Holdings Group and China Resources Land won a Shanghai Yangpu riverfront parcel for 16.1 billion yuan ($2.4 billion) after a 200-round contest, setting a local record of 102,000 yuan per square meter. Poly Developments also secured another Shanghai site at a 25% premium, while China Overseas Land & Investment and China Jinmao pushed Beijing land prices to new highs in August.
However, this selective activity masks a broader contraction in the national land market. Most of China's land market remains subdued, creating a 'K-shaped' split between strong top-tier core parcels and weak peripheral sites. Surviving developers are prioritizing profitability and focusing on core districts of major cities. Nationally, residential land sales by area in 300 cities fell 22.7% year-on-year in the first seven months of 2026, with average floor prices dropping 6.7%. Among 50 residential plots sold in five core cities in May-June, 18 drew premiums above 30%, while 16 sold at starting prices.
New-home sales show a pattern of improvement in high-end core-area projects and clear-value mass-market homes, with the cumulative decline across 50 key cities narrowing to 9% year-on-year in January-July 2026. The resale market is more complex, with sales in 20 key cities falling 16% month-on-month in July, though slightly above year-earlier levels due to deep price cuts. The Politburo elevated property-market stabilization to a national-security priority on July 30, leading Beijing and other cities to ease purchase thresholds and financing.
Local governments are actively curtailing land supply to avoid excess inventory and support prices. Tier-two cities cut residential land supply by 27.5% year-on-year in January-July. This has led to severe fiscal consequences, with state land-sale revenue falling 31.5% year-on-year in H1 2026. State-backed developers dominate the market, accounting for 64% of tracked land spending in H1. Executives describe an 'asset famine' for prime sites, with some expensive plots bought for cash generation and brand positioning rather than standalone profit. Private developers remain largely sidelined.