In the first quarter of this year, China’s land transfer market continued its downward trend from 2025, with less than 30% of real estate companies acquiring land and the land acquisition amount of the top 100 real estate companies halved. It is noteworthy that the land transfer market is showing a trend of “state-owned enterprises advancing, private enterprises retreating”, with central enterprises and state-owned enterprises (local city investment companies) becoming the absolute main force in land acquisition, but hidden risks are present.
Data from China’s two major real estate research institutions, CRIC and CIRI, both show a significant drop in land transfer revenue in the first quarter of this year, following the downward trend from 2025.
According to a report by China Real Estate Network, based on data from CRIC, the total land acquisition amount by the top 100 real estate firms in the first quarter was 146.52 billion yuan (RMB), a year-on-year decrease of 49.4%. Among the top 100 real estate companies in terms of sales, only less than 30% of enterprises have land reserves accounted for.
According to data from CIRI, in the first quarter (as of March 28), residential land transactions in 300 cities totaled 58.93 million square meters, a year-on-year decrease of 25.9%; and land transfer revenue was 215.4 billion yuan, a year-on-year decrease of 45.7%.
A research report released by Yuekai Securities on April 7 revealed that based on public data from various local finance departments, out of the 31 provinces and regions in China, 27 provinces disclosed land transfer revenue for 2025. Among them, 22 provinces experienced a decline in land sales revenue, with Guangdong, Jiangsu, and Shandong—China’s top three provinces by GDP—seeing year-on-year declines of 11.0%, 23.1%, and 18.0% respectively.
According to data from the Ministry of Finance of the Communist Party of China, local government land transfer revenue in 2025 was 4.15 trillion yuan, a year-on-year decrease of 14.7%. This marks the fourth consecutive year of double-digit declines since 2022, with a 52.3% decrease compared to the peak of 8.7 trillion yuan in 2021.
Xie Yifeng, director of the Guangdong China Urban Real Estate Research Institute, recently analyzed that factors such as the Three Red Lines policy, tightened financing for real estate loans, stagnant sales for real estate companies, and other issues have led to a situation where real estate companies are unable to continue investing heavily in land acquisition, resulting in more cases of land auctions, low premium rates, and transactions at the bottom price.
Land transaction fees refer to the total amount paid by the land user to the land management departments at all levels for the transfer of land use rights according to regulations.
An analysis by China Real Estate Network mentioned that in terms of the types of companies acquiring land, the pattern of “led by central enterprises with city investment as the main force” continues, and the overall willingness of enterprises to acquire land remains cautious.
The top ten land acquisition amounts were taken by Yuexiu Property, Poly Property, China Resources Land, China Jinmao, Greentown China, Evergrande, Shijiazhuang City Investment Group, China Merchants Property, Ningbo Kaida Group, and Shanghai Urban Development.
Upon investigation by the reporter from Dajiyuan, it was found that these ten real estate companies are either central enterprises, state-owned enterprises, or joint-stock enterprises controlled by central enterprises and state-owned enterprises, with no private real estate companies among them.
According to data from CIRI, in the first quarter of this year, the majority of the top 20 real estate companies in terms of added value were state-owned enterprises, central enterprises, or local city investment platforms.
From January to November 2025, among the land acquisition amounts in 22 key cities nationwide, private enterprises accounted for only 21%, while central enterprises and state-owned enterprises accounted for a high 79%. The proportion of local city investment platforms has increased from 16% in 2019 to 33% in 2023.
The land acquisition situation for residential land in Beijing this year also reflects this trend. According to data compiled by real estate blogger “Real Estate Rumors” until March 19, a total of 6 residential land plots were released in Beijing in 2026, all of which were sold at the base price, acquired by state-owned enterprises and central enterprises.
On March 17, a plot in Renhe Town, Shunyi District, valued at 348 million yuan at the base price, was acquired by Beijing Renhe Rising Real Estate Co., Ltd., a collectively-owned enterprise of Renhe Town.
On March 18, a plot in Nancai Town, Shunyi District, valued at 571 million yuan at the base price, was acquired by Beijing Zhuzong Jinshun Real Estate Development Co., Ltd.
On February 11, a residential land plot on the south side of Shuiyuan Road in Miyun District, Beijing, was acquired by a joint venture of a subsidiary of Beijing Urban Construction Group and Miyun City Urban Development Investment Group.
On February 3, at the first land auction in 2026 in Beijing, three new land plots in Shijingshan, Tongzhou, and Shunyi were eventually acquired at the base price by Shougang Real Estate, Beito + Beijing Jian Gong consortium, and China Tie Works.
Blogger “Real Estate Rumors” recently mentioned in a post that most of these land acquisitions were made by first-tier development units that participated in the bidding for the land, forming alliances with experienced developers in the area, or in some cases, the first-tier development unit itself directly acquired the plot. These first-tier developers are mostly local city investment companies.
First-tier development refers to the government or authorized enterprises undertaking activities such as land requisition, demolition, resettlement, compensation, and construction of municipal infrastructure (such as “three connections and one leveling”), transforming “raw” land into developable “mature” land, and then transferring it to the final developer.
As for the reasons behind the trend of “state-owned enterprises advancing, private enterprises retreating” in the land transfer market, well-known financial media personality Xu Sanlang pointed out in a post on March 30 on “Macroeconomics of Mars” that many large-scale real estate companies that were once highly leveraged and high turnover have collapsed one after another, leading to a sharp contraction in land acquisition capabilities. However, the reliance of local governments on land finances has not diminished, and land sales revenue remains an important source of off-budget government funds for many cities. As a result, central enterprises and state-owned enterprises have been pushed to the forefront and become the “rescue rangers” of the land transfer market.
Furthermore, the clear bias of the Communist Party in financing policies towards central enterprises and state-owned enterprises is also a significant factor. Blogger “swzswzs Observing Real Estate” recently analyzed that the average financing cost for central enterprises is 3.2%, much lower than the 6.8% for private enterprises, and policy tools such as special debt and acquisition loans are tilted towards them. To stabilize land finances, local governments naturally prefer to cooperate with central and state-owned enterprises that can provide a safety net.
Xu Sanlang emphasized that this “state-owned enterprises advancing, private enterprises retreating” pattern in the land auction market may appear to stabilize the bottom price of the land market on the surface, but hidden risks are accumulating behind the scenes.
During the downturn cycle of the real estate market, private enterprises are busy with asset liquidation, while local governments rely on land finances, leading to central enterprises and state-owned enterprises becoming the main force in land acquisition. After state-owned enterprises and central enterprises acquire land at high prices, they are reluctant to reduce prices for new homes, resulting in low turnover rates, inventory backlog, and a potential extension of the market clearance cycle.
CRIC data shows that from 2021 to 2024, the proportion of city investment in land acquisitions has consistently remained above 50%, reaching a peak of 64% in 2024 and a 50% share in the first quarter of 2025. However, the commencement rates for projects acquired by city investment companies are not high. The project commencement rate for acquisitions in 2021 was 48.9%, while in 2022, 2023, and 2024, it decreased to 40.8%, 26.5%, and 8.5% respectively, indicating a very slow pace of actual development.
However, most of the land acquired by city investment companies consists of plots with unfavorable objective conditions such as location, low market recognition. Blogger “swzswzs Observing Real Estate” analyzed that hasty development may not necessarily yield positive returns and can only result in “time exchanging for space”. Moreover, many city investment companies lack excellent development capabilities and rely on subcontracting. If the quality of the land itself is not high, subcontracting companies may also find it difficult to make a profit, making collaboration equally challenging.