Appetite for land development remains robust, report shows

Land acquisitions by the country's 50 most aggressive developers jumped 70 percent from a year ago in the first seven months of this year, as appetite to replenish land banks remained strong among industry players following robust property sales in 2016.

Prices paid through land auctions by the 50 real estate developers who have been expanding their reserves most actively totalled 1.265 trillion yuan (US$187.8 billion) between January and July, compared to 745.78 billion yuan registered during the same period a year ago, according to the latest research published by Centaline Group, which tracks public land auctions.

"Major developers demonstrated great passion to increase their land inventories as they had gained abundant capital following record property sales in 2016," the report said. "This year will probably witness another record in property sales as data for the first seven months looks very encouraging, though rein-in policies currently enforced mainly in first and second-tier cities proved effective at dampening buyers' sentiment."

Nationwide, Country Garden, which had spent over 112 billion yuan in land acquisitions during the seven-month period, was the only company that managed to get into the 100-billion-yuan club. It was closely followed by Poly Real Estate and China Vanke Co, which paid 95.5 billion yuan and 81.1 billion yuan, respectively, to acquire land parcels, the Centaline report showed.

In comparison, in the first seven months of 2016, Sunac China, China Vanke Co and Poly Real Estate were the three most ambitious land buyers, with their land acquisition costs standing at 47.5 billion yuan, 41.8 billion yuan and 38.6 billion yuan, respectively.

The number of developers paying more than 10 billion yuan for land plots in the first seven months of 2017 totaled 39, a notable increase of 12 from the same time a year earlier.

Third-tier cities caught the most rapidly growing attention from developers compared to their larger counterparts, with more than 10 tertiary cities including Foshan, Wenzhou, Wuxi, Ningbo and Jiaxing managing to join the 10-billion-yuan land club in the first seven months of this year.

Nationally, Wuhan, Nanjing, Zhenzhou, Hefei and Suzhou remained some of the country's hottest land markets for developers, the report said.