China’s residential land market showed clear signs of cooling in the third quarter of 2025, as data from the China Index Academy revealed a noticeable slowdown in both land sales activity and developer enthusiasm.

According to the report, the average premium rate for residential land across 300 major cities fell to 5.8% in Q3, reflecting more cautious bidding from developers amid broader market uncertainties. The decline comes as the release pace of high-quality land parcels in key first- and second-tier cities has slowed, reducing competitive pressure in land auctions.

In addition to the lower premium rate, the total transaction area of residential land dropped 13% year-on-year, while land transfer revenue fell by 10% compared to the same period in 2024.

Analysts say the data indicates a more rational and risk-averse approach by real estate developers, many of whom are focusing on cash flow stability and reducing financial exposure in the face of tighter regulations and ongoing market adjustments.

The China Index Academy noted that while core cities still hold long-term appeal, the subdued activity in Q3 points to a cautious sentiment prevailing in the land market — a trend that may continue unless stronger policy signals or demand-side recoveries emerge.