Mainland land sales climbed to a 16-month high to 66.3 billion yuan (HK$81.79 billion) last month as higher home sales boosted developers' confidence. Data from mainland consultant E House showed the average land price in 10 cities rose 18 per cent from October to 2,580 yuan a square metre.
The cities are Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Dalian, Hangzhou, Nanjing, Qingdao and Nanchang.
"Developers are getting more upbeat on the outlook thanks to improved cash flow and good market conditions," said Alan Jin, an analyst at Mizuho Securities.
Centaline China said 11 developers, including China Vanke, Greentown China, China Merchants Property Development, Poly Real Estate, and Gemdale Group, spent about 11.04 billion yuan to acquire land last month.
China Vanke, the mainland's largest listed developer, added 23 sites to its kitty. These assets could yield up to 3.76 million square metres of gross floor area in third-tier cities such as Xuzhou in Jiangsu, Guiyang in Guizhou and Putian in Fujian.
Developers had been actively replenishing their land banks since October after seeing a pick-up in home sales, said Centaline.
And, with developers diving back into the market, prices have started galloping. Last month, a commercial site in Huangpu, Shanghai, fetched 2.77 billion yuan, or 36,000 yuan per square metre, a record this year for the city in terms of unit price.
A site in Nanjing sold for 5.6 billion yuan, or 7,753 yuan per square metre, the priciest piece of real estate to have changed hands in China this year.
Yesterday, China Aoyuan Property won rights to a site that will provide a total gross floor area of 500,000 square metres, in Panyu, Guangzhou, with an opening bid of 3.4 billion yuan, or 6,800 yuan per square metre.
Mizuho's Jin, however, said the level of optimism varied.
"Only those with strong sales have the luxury of bidding for prime land. Many developers, especially small ones, aren't out of the woods yet," he said.
Shares of major mainland property stocks surged after reporting strong sales yesterday.
Evergrande Real Estate jumped 8.9 per cent to HK$4.09 after saying sales from January to November were 5.8 per cent more than its target for the year.
Property sales reached 11.79 billion yuan last month, raising the total revenue to 84.6 billion yuan in the first 11 months. Its whole-year target was 80 billion yuan.