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South China Morning Post

China property market heats up in core cities amid recovery led by policy moves

China's property market is showing new signs of life as developers bid for rare, centrally located plots amid a retreat from strict price caps and a growing shift toward high-quality housing demand. Advertisement The average land premium in 22 major cities on the mainland has hovered at around 20 per cent for four consecutive months this year – well above the 5 to 10 per cent range seen in 2024 – after local governments started to relax price ceilings, according to a report from the China Index Academy. Analysts said this was an early sign of a potential recovery in the housing market, though structural challenges remain. In Nanjing, a site in the core Hexi area garnered a 43 per cent mark-up, the city's first premium to top 40 per cent since 2020. In Hangzhou, home to tech luminaries including Post owner Alibaba Group Holding and DeepSeek , private developer Binjiang Real Estate Group paid 5.2 billion yuan (US$715.1 million) for a plot of land with a premium nearing 70 per cent, the China Index Academy report said on April 24. 'The structural recovery in land transactions at the start of the year has injected fresh confidence into the market,' said Ma Qianli, a research director with property think tank China Real Estate Information Corporation (CRIC). As the momentum begins to spill over – and with continued progress on urban village redevelopment initiatives – the second half of 2025 could bring a more sustained and broad-based recovery for China's housing sector, he said. Advertisement The surge in land premiums is a shift from just a few years ago, when credit tightening and a pullback among homebuyers triggered the country's worst-ever property downturn. Depressed demand and government-imposed caps cast a further pall over auctions and bids during the Covid-19 pandemic. Local governments, which historically relied on land transfer revenues for their fiscal stability, have struggled to revive the auction market as private developers grappled with liquidity issues.