(Yicai) Dec. 18 -- Chinese property developers are struggling to decide what to do with immense stretches of idle land acquired at high premiums before 2021. Developing these plots is often unprofitable today, while regulatory pressures and outdated project plans complicate matters.

As of July 31, 27 major cities had 22,000 hectares of residential land that had not begun home pre-sales, with 9,000 ha not even under construction, according to data from China Real Estate Information Corporation. Most of this land was bought at the peak of the land market before 2021, and no one is willing to develop or buy them now.

“Developers prefer low-fee contract construction work rather than developing their own idle land,” a manager at a defaulted builder in East China told Yicai. Explaining why there is little incentive to accelerate construction, he said the firm’s long-undeveloped land remains an on-book asset while idle, but developing it now would generate losses.

The company had over 400 ha of undeveloped land as of June 30, with new construction in the first half of the year totaling just 12 ha, according to its semi-annual earnings report. At this pace, it would take the firm 16 years to develop its entire idle land inventory.

Another defaulted property developer has more than 2,500 ha of unused land, mostly in second-tier cities, despite not having bought any new plots for years. This developer sold less than 100 ha of properties in the first half of 2025. At this rate, it would take 20 years to clear its land reserves.

“In the past, land was a highly valuable asset,” a manager at the builder said. “Now even creditors avoid it, preferring completed properties that are easier to monetize.”

Outdated project plans that no longer match current demand also discourage developers from developing pre-2021 land, the manager pointed out.

Per regulations, land with development permits that have not started construction work within two years are classified as idle, and local governments may take back the development rights.

But some cities do yet not have the funds for land acquisition, and others offer much lower prices when buying back idle land, according to a manager at a third defaulted builder. "This has discouraged developers from selling,” he said.

Complex debt structures have left land ownership unclear, making reclamation difficult for local authorities, another official at a private developer pointed out.

The amount of undeveloped land varies from city to city, and local conditions should be used to guide targeted measures, said Ma Qianli, a researcher at the CRIC. Ma suggested cities with high idle land ratios hasten reclamation to improve market expectations, while those with higher construction rates ensure smooth home sales, offering both high-end and affordable housing.

For projects facing sales issues under the original plans, developers should be allowed to moderately adjust the plans to boost sales, Ma added.

Localities should adopt more flexible measures to help builders dispose of long-idled plots, such as adjusting planning conditions and design requirements, one of the manager’s suggested.

"Many of these plots are in newly developed urban areas, and some high-density projects were planned assuming major population inflows, which no longer align with current market conditions,” he said.

Editors: Tang Shihua, Futura Costaglione