Prime city core areas continue to attract high interest

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Our reporter Zhang Xiangyi

Against the backdrop of new changes in supply-and-demand relationships in the real estate market, this year’s first quarter saw the national land market continue the “lower volume but higher quality” characteristics. Compared with the same period last year, local governments’ land supply schedule overall slowed down somewhat, while core cities’ high-quality land plots remained relatively hot.

Industry insiders believe that, under the policy orientation of “controlling incremental supply, de-stocking, and optimizing supply quality,” the land market’s structure has continued to improve. In the future, the focus of land supply in various regions will accelerate toward high-quality, improvement-oriented housing.

Land supply pace slows

Data from the China Index Academy shows that in the first quarter of 2026, among the 300 key cities under nationwide monitoring, residential land for planned construction area of 64.72 million sq. meters was released, down 23.8% year over year; land was transacted for 58.93 million sq. meters, down 25.9% year over year.

By city tier, first-tier cities’ land markets remained relatively steady, with the supply side maintaining a certain scale. In second-tier cities, aside from Hangzhou and Chengdu, most cities saw both the supply and transaction scales of residential land remain relatively low.

“Among the cities that rank higher in the sales proceeds from the transfer of national residential land, many are core first-tier and second-tier cities. Real estate companies’ capital continues to concentrate on high-quality assets with stronger certainty.” Cao Jingjing, General Manager of the Index Research Department at the China Index Academy, told reporters from The Securities Daily that high-quality land plots in core cities still maintain relatively high premium levels.

In February, the plots in Guangzhou’s Tianhe District, south of Huangpu Avenue and east of Maching Road (Maching Phase 1 plot), after 9 hours and 243 rounds of bidding, were won by Yuexiu Properties for RMB 23.6B, with a premium rate of 26.6%. The total transaction price ranked second in Guangzhou’s history and fifth nationwide. The residential land price for floor area was about RMB 85k per sq. meter, setting a new record for Guangzhou’s residential floor-area land price.

Li Yujia, Chief Researcher at the Guangdong Housing Policy Research Center, said in an interview with reporters from The Securities Daily that currently, developers tend to focus on core cities and specific land plots. Besides plots with exceptionally strong value for money, developers are more cautious about acquiring other plots.

Looking ahead to the second quarter, Cao Jingjing believes that core areas in first-tier and strong second-tier cities are expected to see more high-quality residential land entering the market. With advantages in high-quality location and improved supporting facilities, the land market’s warmth and stable expectations are likely to be maintained.

Control increments and provide better supply

The land market is the key upstream of the property market, and local land supply has a major impact on the supply-and-demand relationship in real estate.

In efforts to stabilize the real estate market, the 2026 Government Work Report proposed: “Control increments, de-stocking, and provide better supply tailored to local conditions.” Under this direction, in 2026, localities generally reduced their annual land supply scale.

For example, the “Beijing Municipality 2026 Annual Plan for the Supply of Construction Land” clearly states: “Arrange 750—790 hectares of residential land, among which the flexible indicators for commodity housing land will be 200—240 hectares.” Among them, the supply scale of commodity housing land will be reduced by 40 hectares from 2025 to 60 hectares.

While controlling the scale of land supply, localities also work to improve the quality of land supply. The “Beijing Municipality 2026 Annual Plan for the Supply of Construction Land” proposes to enhance the precision of newly added real-estate land supply, effectively revitalize existing stock real-estate land, and promote coordinated linkage among factors of people, housing, land, and money. Continue to optimize the supply of commodity housing, promote balanced development among jobs, living, and commerce services, intensify efforts toward station-city integration, and prioritize development and construction around rail transit stations, in areas with relatively complete facilities, and in job-dense areas. Promote the implementation of “good housing,” improve housing quality, and strengthen supporting arrangements for local infrastructure and public services.

The “Shenzhen Municipality 2026 Annual Plan for the Supply of Construction Land” clearly states that, following the principles of “precious land for precious use, and living with high-quality residence,” it is necessary to reasonably grasp the total supply, timing, and spatial layout of commodity residential land, accurately match market demand, and increase spatial supply for high-quality housing and improvement-oriented housing.

Cao Jingjing believes that these adjustments collectively reflect that housing demand has upgraded from “whether there is housing” to “whether housing is good,” driving the real estate industry to transition to a new development pattern that places greater emphasis on improving residential functions and better aligning with real housing needs.

Regarding how to optimize supply, Li Yujia suggested implementing differentiated land supply on a district-by-district basis according to factors such as the competitive level of projects currently for sale and residents’ demand characteristics. For land plots that have already been supplied but remain undeveloped, they can be transferred to other developers, or effectively revitalized through the government’s reserve acquisition.

Li Yujia believes that in the future, various regions will decide whether to release new land plots based on factors such as the pace of destocking of newly launched projects within each district and the development schedule for land already transferred; at the same time, they will continue to transfer land plots with exceptional value for money, attracting developers to acquire land through advantages in location and planning.

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