China’s land purchases shrank 38% in first 7 months of 2024 amid festering property slump

China’s property developers have slowed their land grab as a slowdown in home sales continued in the industry, deterring their appetite to invest or expand their land bank.

Land purchases by mainland China’s 100 largest developers declined by 38 per cent in the first seven months of this year to a combined 430.7 billion yuan (US$59.6 billion), compared with the same period last year. The rate of decline picked up by 2.2 percentage points compared to the first half of this year, according to a report published on Thursday by the China Index Academy.

C&D Group, a state-owned developer based in the Fujian provincial city of Xiamen in southeastern China, led the pack, spending 27.9 billion yuan during the period on land acquisitions. State-owned developers dominate the property market due to easier access to funding, challenging the ability of private developers to catch up in the near future, according to analysts.

China Greentown Holdings Limited, whose largest shareholder is the state-owned China Communications Construction Group based in the Zhejiang provincial capital of Hangzhou, was the second-largest buyer, spending 22.8 billion yuan acquiring plots.

CSCEC Yipin, which builds upmarket homes and provides management services for state-owned China State Construction Engineering Corporation, ranked third with 21.3 billion yuan in land acquisitions.

“In the current environment, central state-owned enterprises (SOEs) are still more active than private players, mainly due to their smooth financing channels,” said Wang Xingping, a senior analyst at Fitch Bohua.