Positive Comments: “Reducing Quantity and Improving Quality” Promotes the Healthy Restoration of the Land Market, with Core Cities Becoming the Anchor of Industry Confidence
In mid – 2025, the strategy of “reducing quantity and improving quality” in the land markets of Shenzhen and the whole country is showing positive effects and has become a key driving force for the restoration of the real estate industry. This trend not only activates market vitality but also stabilizes market expectations through the optimal allocation of resources, laying a foundation for the industry’s transformation towards high – quality development.
First of all, the concentrated supply of high – quality land plots has effectively boosted market confidence. As a first – tier city, Shenzhen’s supply of residential – related land has increased by 116% year – on – year this year, with a focus on core areas such as Dayun, Guangming Central District, and Qianhai Guiwan. These areas have mature supporting facilities (such as the Costco business in the Hongshan – Shangtang area and the Metro Line 6 in the Guangming Central District) and strong demand (the average transaction price in the Minzhi area in May was 62,900 yuan per square meter, and “sold – out in a day” properties frequently appeared). The launch of high – quality land plots precisely meets the real estate enterprises’ demand for “certainty investment”. For example, the plot A802 – 0309 in Shenzhen has a floor area ratio of only 2.8 (lower than that of plots sold in the surrounding areas in recent years) and is adjacent to Metro Line 4. The high expectation of sales directly attracts the attention of real estate enterprises. According to data from CRIC, the national land premium rate in the first quarter of 2025 returned to over 10% for the first time in 44 months. There have been frequent land – grabbing phenomena in Beijing, Shanghai, Hangzhou, Chengdu and other places, where the total price of land exceeds 5 billion yuan and the premium rate exceeds 100%. This is not only a direct reflection of market heat but also marks the industry’s transformation from “scale expansion” to “quality priority”.
Secondly, the optimization of the land supply structure has injected impetus for sustainable development into the industry. Local governments have improved the feasibility of land development by reducing the floor area ratio (for example, the floor area ratio of a plot in Baozhong, Shenzhen has been adjusted from 5.7 to 3.7) and reducing the commercial proportion (the commercial construction area has been reduced from 137,500 square meters to 30,000 square meters). Take the plot A817 – 0619 in Shenzhen as an example. The starting floor price is 30,400 yuan per square meter, while the average price of new houses in the surrounding area exceeds 70,000 yuan per square meter, with a clear profit margin. This “concession” strategy not only attracts real estate enterprises to acquire land but also leaves a reasonable space for subsequent project pricing, avoiding pushing up housing prices due to high costs and forming a virtuous cycle of “land – new houses – market”. The China Index Academy pointed out that the new – house market in Shenzhen has continued to recover after the Politburo meeting on September 26th. The warming up of the land market is an extension of the natural recovery of the market, which helps to stabilize local finances and drive the recovery of upstream and downstream industries such as construction, decoration, and home furnishings.
Finally, the recovery of the land market in core cities has become the “anchor” of industry confidence. High – premium land auctions in Beijing, Shanghai, Hangzhou and other places (such as the 38% premium rate of the Ruihong New City plot in Hongkou, Shanghai, and the over 40% premium rate of the Sandun plot in Xihu, Hangzhou) reflect real estate enterprises’ recognition of the long – term value of core cities. This confidence is transmitted throughout the industry, not only alleviating the financial pressure on real estate enterprises but also promoting the transformation of market expectations from “pessimistic” to “cautiously optimistic”, providing fertile ground for the construction of a new industry model (such as “high – turnover + high – quality”).
Negative Comments: The Intensified Differentiation of Market Heat Aggravates Regional Imbalance, and Multiple Risks are Hidden Behind High Premiums
Although the recovery of the land market is a positive signal, the differentiation trend and potential risks behind it cannot be ignored. The sharp contrast between the “high – heat” in core cities and the “freeze” in third – and fourth – tier cities, as well as problems such as the squeezing of profit margins from high – premium land acquisition and regional development imbalance, may pose challenges to the long – term healthy development of the industry.
Firstly, the white – hot competition for land in core cities may squeeze the profit margins of real estate enterprises. The floor price of a plot in Hongkou, Shanghai is 117,000 yuan per square meter, and the premium rate of the Sandun plot in Xihu, Hangzhou exceeds 40%. High costs mean that the future selling price of projects needs to reach a higher level to cover the costs. However, housing prices in core cities are already at a high level, and there is uncertainty about market acceptance. For example, the last supply of residential land in Qianhai Guiwan, Shenzhen was in 2021, with the online – signed average price ranging from 91,000 to 120,000 yuan per square meter. If the floor price of new plots is close to or exceeds this level, the profit space of projects will be greatly compressed. If subsequent sales fall short of expectations, real estate enterprises that acquire land at high premiums may face financial chain pressure and even trigger local debt risks.
Secondly, the stagnation of the land market in third – and fourth – tier cities aggravates regional development imbalance. According to CRIC data, the planned supply of residential land in third – and fourth – tier cities in 2025 has only decreased by 14%. However, in actual implementation, land supply has been suspended in many places such as Yongfu in Guilin and Shitai in Chizhou, and the pre – supplied land scale in more than half of the cities has been halved. Land is an important source of local finance. The stagnation of the land market may lead to increased debt pressure on local governments, limited investment in infrastructure construction and public services, and further weaken the population attraction and industrial competitiveness of third – and fourth – tier cities, forming a vicious cycle of “cold land market – weak finance – slow development – population outflow – colder land market”.
Thirdly, the participation opportunities for small and medium – sized real estate enterprises are decreasing, and market concentration may further increase. The high total price (such as the 8.964 billion – yuan plot in Hongkou, Shanghai) and high threshold (requiring strong financial and operational capabilities) of high – quality land plots in core cities mean that the main participants are central state – owned enterprises, local state – owned enterprises, and leading private enterprises (such as China Jinmao, Greentown, and Binjiang). Small and medium – sized real estate enterprises find it difficult to compete due to insufficient financial strength. In the long run, the land market may be monopolized by a few large enterprises, resulting in a decline in market competition vitality and innovation impetus, which is not conducive to the long – term healthy development of the industry.
Fourthly, overheating in local markets may trigger policy regulation risks. Currently, the high heat of land auctions in core cities is mainly due to the release of pent – up demand and policy support. However, if the premium rate remains too high and land prices rise too rapidly, it may trigger a new round of regulation (such as premium limits and housing price limits), affecting the effectiveness of real estate enterprises’ previous investment decisions. For example, if Shenzhen tightens pre – sale conditions or strengthens price guidance due to overheating in land auctions, projects acquired at high costs may face the dual squeeze of “price limits” and “high costs”, further compressing the profit margins.
Suggestions for Entrepreneurs: Seize the Opportunities in Differentiation, Focus on Certainty and Innovation
Facing the “reduction in quantity and improvement in quality” and regional differentiation in the land market, entrepreneurs need to adjust their strategies and seize the following opportunities:
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Core Cities: Provide “Value – Added Services” around High – Quality Land Plots
The development demand for high – quality land plots in core cities is strong, but real estate enterprises pay more attention to the “certainty” of projects (such as sales speed and profit margins). Entrepreneurs can provide customized services according to this demand. For example, provide regional market research for real estate enterprises (such as the customer profile and consumption preferences in the Hongshan – Shangtang area of Shenzhen), optimize product design (such as the positioning of improved products for plots with a low floor area ratio), and offer marketing solutions (such as using commercial facilities like Costco in the surrounding area for cross – border customer attraction) to help real estate enterprises enhance project competitiveness and reduce development risks. -
Third – and Fourth – Tier Cities: Shift to the Stock Market and Light – Asset Models
Although the land market in third – and fourth – tier cities is sluggish, there is still room in areas such as the renovation of existing housing, community services, and urban renewal. Entrepreneurs can focus on the operation of existing assets, such as the renovation of old residential areas (installing elevators and optimizing property management), the upgrading of community commerce (introducing convenient service facilities), and the operation of rental housing (long – term rental apartments targeting new urban residents and young people) through light – asset models, avoiding direct participation in the primary land market and reducing financial pressure. -
Pay Attention to Policy Orientation and Layout in “Quality – Improvement” – Related Tracks
“Reducing quantity and improving quality” means that more attention is paid to the quality of land development. Areas such as green buildings, smart communities, and low – carbon technologies will become trends. Entrepreneurs can develop products such as energy – saving building materials, intelligent security systems, and community energy management platforms around these directions, providing “quality – improvement” solutions for real estate enterprises and meeting the requirements of “high – quality development” encouraged by policies. -
Cooperate with Small and Medium – Sized Real Estate Enterprises: Provide Financial and Operational Support
Small and medium – sized real estate enterprises have difficulty acquiring land in core cities, but they may have experience in regional development or characteristic product lines (such as cultural and tourism real estate and industrial real estate). Entrepreneurs can provide services such as financial bridging, agency operation, and cost control for small and medium – sized real estate enterprises through joint development, agency construction, supply – chain finance and other means, helping them participate in projects in core cities and sharing project revenues at the same time. -
Risk Warning: Establish a Dynamic Monitoring Mechanism
In the context of the differentiated heat in the land market, entrepreneurs need to establish a dynamic market monitoring mechanism, pay attention to the linkage between land prices and housing prices in core cities (such as the ratio of the floor price of a plot in Qianhai Guiwan, Shenzhen to the surrounding housing prices), policy regulation signals (such as adjustments to the premium rate limit), as well as population flow and industrial changes in third – and fourth – tier cities, and adjust business directions in a timely manner to avoid losses caused by market fluctuations.
In short, the current “reduction in quantity and improvement in quality” in the land market is not only a sign of industry restoration but also contains structural opportunities and risks. Entrepreneurs need to take “certainty” as an anchor, focus on high – quality land plots in core cities and the stock market in third – and fourth – tier cities, combine policy orientation and technological innovation, find breakthrough points in differentiation, and achieve stable development.
