Real estate developers have become more "focused" in land acquisition.
According to data from China Index Academy, this week (October 12-18), the planned floor area of residential land transactions in 300 cities reached 18.74 million square meters, with total land transfer fees of 73.6 billion yuan, and the transaction scale increased significantly compared with last week. However, the average premium rate was only 0.54%, dropping to the lowest weekly level this year. From the perspective of city tiers, the transacted plots this week are concentrated in third- and fourth-tier cities, with no residential land transactions in first-tier cities. Real estate enterprises are generally prudent in land acquisition, and the land market is still in a low-level operation stage.
The land auction market remains generally tepid, high-quality plots in Wuhan and Dalian are transacted at premium prices
The land auction market in key cities this week is still generally tepid. Among core cities, only one plot each in Wuhan and Dalian was transacted at a premium, and transactions at reserve price remain the mainstream. From the characteristics of transacted plots, they mainly present the following features:
First, low-density, small and medium-sized plots continue to dominate. Among the plots transacted this week, 24 plots have a floor area ratio of 1.5 or below, accounting for about two-thirds of the total number of transactions, with the lowest floor area ratio being only 1.04. Low-density improved-type land supply remains the key direction of land supply in key cities. In terms of plot size, except for two plots in Pukou and Jiangning of Nanjing with planned floor area exceeding 100,000 square meters, the rest are generally less than 100,000 square meters, and the transaction price of most single plots is below 500 million yuan. The land supply side continues to tilt towards "small but high-quality" plots.
Second, scarce plots with superior locations maintain a certain degree of bidding enthusiasm. Plot P(2026)091 in Guanggu Central City, Wuhan is located in the northern part of Guanggu Central City, adjacent to Metro Line 11, with dense surrounding industrial carriers and public supporting facilities. The plot has a floor area ratio of 1.5, a planned floor area of 67,000 square meters, and a starting price of 440 million yuan, with a relatively manageable total price threshold. After 66 rounds of bidding, it was won by Hanyang Urban Construction at 590 million yuan, with a premium rate of 33.1%. The transacted floor price of the plot in the South District of Zhongshan is 13,564 yuan per square meter, with a premium rate of 13.1%. Both plots are characterized by good location conditions, small size and low total price, reflecting that against the background of the overall market dominated by reserve price transactions, real estate enterprises still maintain a certain willingness to bid for high-quality plots with high certainty, but the bidding enthusiasm has not spread to peripheral sectors and general plots, and the pattern of market differentiation continues.
Land to be auctioned in October: Wuxi, Suzhou and Nanjing lead in the amount of land to be auctioned
As of October 18, according to the monitoring of China Index Academy, among the plots to be auctioned in key cities in October, Wuxi (11.74 billion yuan), Suzhou (10.06 billion yuan) and Nanjing (9.79 billion yuan) rank top three in terms of land transfer fee scale. At the same time, Wuxi, Suzhou and Nanjing continue to adopt the land supply mode of "multiple plots with small size", with an average starting price of 300 million to 500 million yuan.
In terms of first-tier cities, the scale of land to be auctioned is still at a low level. At present, only Guangzhou has 5 plots to be auctioned with a starting price of 1.72 billion yuan, and there are no plots to be auctioned in Beijing, Shanghai and Shenzhen. The phased characteristics of the land supply rhythm continue. Considering that the end of the year is usually an important period for residential land supply, it is expected that residential land in first-tier cities will be launched one after another subsequently, and its supply rhythm and plot quality are worthy of continuous attention.
Overall, the land auctions in key cities this week continue to operate at a low level, dominated by reserve price transactions, with a small number of high-quality plots transacted at premium, and the market is characterized by obvious differentiation. At the policy level, as the implementation rules of more cities are successively rolled out, the reform of the commercial housing sales system has entered the stage of implementation and verification. Enterprises are still digesting and adapting to project profit calculation, development mode and capital arrangement under the new rules, and their land acquisition decisions are generally relatively prudent. Looking ahead to the market, the recovery of the land market still depends on the sustainability of the improvement in housing sales and the recovery of the capital situation of enterprises, and the phenomenon of differentiation between hot and cold land auctions will continue.
This article is from the WeChat Official Account "China Index Academy", author: China Index Research, published with authorization by 36Kr.