According to statistics from Ke Rui Real Estate Research, in June, the land market continued with its strategy of "frequent transactions, small quantities, and high quality." Hot land plots in cities like Hangzhou and Hefei led to a partial recovery in the land market, with Poly Developments, China Resources, and China Overseas among several state-owned enterprises taking land this month. In general, in the first six months, corporate investment continued to shrink, and the total amount of land taken by the top 100 investors decreased by 40% year-on-year, hitting a new high since 2023. In addition, the land-to-sale ratio of sales companies ranked among the top 100 was only 0.14, showing their cautious attitude.

"Frequent transactions, small quantities, high quality" supply of land leads to a partial recovery in the land market.

As of June 25th, the operating land transaction volume in 300 cities nationwide reached 41.52 million square meters, up 22% month-on-month but down 32% year-on-year.

In order to maintain a proper level of heat and frequency in land market transactions while controlling the size of inventory, the strategy of "frequent transactions, small quantities, and high quality" has become more common. In the first and second-tier cities, only Xi'an had a construction area of over 800,000 square meters by press time, and all other cities were below 700,000 square meters. Beijing and Xiamen saw transaction amounts exceeding RMB 10 billion, while other cities were below RMB 5 billion.

As the proportion of high-quality plots sold increased, the average floor price in June rose to RMB 2,877/square meter, up 19% month-on-month, ending up near the average of the past year.

The total amount of land taken by the top 100 investors decreased by 40% year-on-year.

As of the end of June, the threshold for the top 100 new land reserves was RMB 2.61 billion, down 37% year-on-year, with the threshold for total value and construction area of the top 100 being RMB 990 million and 221,000 square meters respectively, both decreasing by 37% and 16% year-on-year. Compared with the end of May, the year-on-year decline in the threshold for the top 100 values did not change much.

More than half of 2024 has passed, but corporate investment has not yet shown signs of improvement. Only 5 companies had investment amounts exceeding RMB 20 billion, and only 12 companies had amounts exceeding RMB 10 billion, a decrease of 4 and 3 companies respectively compared to the same period last year.

In terms of the overall amount of investment, the year-on-year decline in land reserves, total value, and construction area of the top 100 new land reserves for the first six months was 34%, 40%, and 19% respectively, and the year-on-year decline in the total amount of land taken was a record high since 2023. The situation of corporate investment shrinking remains severe.

The land-to-sale ratio of companies ranked among the top 100 remained at a low of 0.14.

From January to June, the investment willingness of the top 100 real estate companies remained low, and with the decline of the sales rankings, the willingness to take land has also continued to decline.

The land-to-sale ratio of the top 100 real estate companies for the first six months fell to 0.14, 0.01 lower than the end of last month. In terms of sales rankings, the higher the rankings, the more actively companies tended to invest. The top 10 real estate companies had the highest land-to-sale ratio of 0.15, but the land-to-sale ratios of all the rankings hovered at a low level, with little difference between them.

In terms of concentration, the top 10 real estate companies accounted for 53% of the total value of the top 100 new land reserves, a decrease of one percentage point from the end of last month. The next 10 companies accounted for 16% of the total value of the new land reserves, with the first two ranks accounting for nearly 70% of the total value of the new land reserves.

Typical real estate companies invested 28.8 billion RMB in June, a month-on-month increase of 101%. On the one hand, this was due to the low base in May, and on the other hand, core cities such as Nanjing and Hefei attracted large companies to participate in land acquisitions. However, the year-on-year decline was still as high as 75%, far from last year's levels of land purchases. Specifically, Poly Developments, China Overseas, and China Resources, among other state-owned enterprises, continued to make moves in core cities, while China Fortune maintained an active posture, with a single-month land acquisition of over RMB 8 billion.

The amount of land taken by typical real estate companies in June stopped falling and rebounded. The 30 real estate companies being monitored invested a total of 28.8 billion RMB, up 101% month-on-month. This was due to the fact that the base in May was low, and core cities such as Nanjing and Hefei attracted large companies to participate in land acquisitions. However, the year-on-year decline was still as high as 75%, far from last year's levels of land purchases. Specifically, Poly Developments, China Overseas, and China Resources, among other state-owned enterprises, continued to make moves in core cities, while China Fortune maintained an active posture, with a single-month land acquisition of over RMB 8 billion.

In the first half of the year, only 30% of the top 100 real estate companies took land, mainly consisting of the familiar faces of the top 30 sales, with their investment amount accounting for 82% of the top 100 real estate companies' land purchases.

In addition, 70% of the top 100 real estate companies that had taken land in the first half of the year saw a decrease in investment from the same period last year, with the top 10 sales rankings declining to varying degrees. This occurred despite the marked slowdown in investment by state-owned enterprises in 2024. Among them, more than 30% of the companies saw a decline of over 50% compared to the same period last year, with Vanke and Yango declining by more than 90% and Poly Developments, China Overseas, and Zhonghai declining by more than 70%. While Binjiang and Yuexiu still ranked high for the amount of land taken in the first half of the year, both saw declines of 44% and 45% year-on-year. Only China Railway Construction, Longfor, and China Fortune saw smaller declines of less than 15%. This shows that with the slow pace of land supply and the lack of high-quality plots, corporate investment expansion is not highly regarded.

It is worth noting that 30% of companies saw year-on-year increases in the amount of land purchased. Among them, state-owned enterprises such as China State Construction First Grade, Lianfa, and China World Trade performed relatively well, with significantly larger year-on-year increases in the amount of land purchased, which was mainly concentrated in first and second-tier cities.

Overall, in the first half of the year, corporate investment remained cautious, with only 30% of the top 100 real estate companies taking land, mainly consisting of the familiar faces of the top 30 sales, and with their investment amount accounting for 82% of the top 100 real estate companies' land purchases. Additionally, 70% of companies that had taken land in the top 100 saw a year-on-year decrease in investment, with the top 10 sales rankings declining to varying degrees, and even state-owned enterprises significantly slowing down their pace of investment in 2024. More than 30% of companies saw year-on-year declines of over 50%, with Vanke and Yango declining by more than 90% and Poly Developments, China Overseas, China State Construction First Grade, and China Overseas declining by more than 70%. While Binjiang and Yuexiu still ranked high for the amount of land taken in the first half of the year, both saw declines of 44% and 45% year-on-year. Only China Railway Construction, Longfor, and China Fortune saw smaller declines of less than 15%. This shows that with the slow pace of land supply and the lack of high-quality plots, corporate investment expansion is not highly regarded.

Stimulated by high-quality and low-density land, the investment intensity of enterprises in the second half of the year may rebound.

Faced with a slowdown in sales and the tightening of controls by local governments, while supply is shrinking, governments have also increased the stimulation of high-quality and low-density land, resulting in increased land auction heat in cities such as Qingdao and Nanjing. Next, there will still be low-density residential land transactions in cities such as Nanjing, Tianjin, Suzhou, Changsha, and Hefei. With the stimulation of these high-quality land, the land auction market is expected to see sporadic rebound and repair the development expectations of core sectors.

For enterprises, under the gradual recovery of market confidence and the improvement of land quality, it is expected that the investment intensity of real estate companies will increase compared to the first half of the year. Some state-owned enterprises with a small amount of land taking in the first half of the year may actively participate. However, due to the limited scale of land supply and the fact that enterprise funding pressures have not been substantially eased, the cautious investment attitude is difficult to change in the short term.