The Communist China’s Property Market Slump: Nearly 80% Of Successful Bids At Centralized Land Auctions In 2021 Have Not Yet Started To Build

According to Caixin, a well-known news outlet in China, when the centralized land supply policy was first implemented, the market once expected that projects might be built at the same time, it would lead to a fierce price war when the new properties launch in market together. However, one year has passed, this prediction has not become a reality.

On June 9th, Wu Jiaming, a researcher at the Research Center of CRIC China, said in an online salon: Only 21% of the projects bought at centralized land sales in 22 hot-spot Chinese cities in 2021 have started to build, and nearly 80% have not yet started.

Real estate and related industries account for more than a quarter of China’s economy, according to Moody’s estimates.

According to CRIC’s statistics, as of the end of the first quarter of 2022, the housing starts of the first round of centralized land sales in 2021 was 37%, the housing starts of the second round was 16%, and the housing starts of the third round was only 3%.

It has been more than a year since the centralized land supply policy was introduced in February 2021. According to the unified deployment by government, in the four first-tier cities Beijing, Shanghai, Guangzhou and Shenzhen, as well as 18 second-tier cities such as Nanjing, Suzhou, Hangzhou, Xiamen, Fuzhou, Chongqing, Chengdu, Wuhan, Zhengzhou, Qingdao, Jinan, Hefei, Changsha, Shenyang, Ningbo, Changchun, Tianjin, Wuxi, etc., residential land auctions would be implemented in “two centralized measurements”, that is, centralized issuance of auction announcements and centralized organization of auction activities.