Land King High Tide in 2007 and 2010 Preceded Downturns

The last peaks in "land king" activity (a record setting land price) occurred before downturns in the real estate market. The third tide is peaking in 2016.

iFeng: 地王潮高烧正热 报告称一线楼市调整马上来
Since 2004, the supply of land, "8.31" Doomsday so far, the domestic land market in general has experienced three waves of "king tide": the first time after 2007 years ago, the second time after 2010, the third time is 2016 year. This time, the national property market differentiation severe destocking battle just more than half, the king on some areas has shown a high fever trend.

By the end of May, the total number of this year's king has exceeded 100, "high total price, high list price, high premium," the land has become the most significant reflection of the first half of the real estate market. "Do not rush to participate in the risk out of food, at least you can grab future expectations." In the domestic housing prices in the top five of a third party who engaged in land investment work Shilin Meng (a pseudonym) told First Financial Correspondent .

However, history is always striking similarities, the two previous experience tells us: "king tide" always occurs in the property market volume and price go up, stocks fall under the background that ignited the severe macro-control, at last making the market cool.

...CRIC analyst Xie Yang said that the relationship between supply and demand is a direct impact on price movements, land is one of the driving factors in housing prices, higher than the floor price directly surrounding the price will make you feel house prices to rise, naturally, to go buy.

...The first report issued by the Ministry of Securities Research said the current king phenomenon is ample liquidity, financing channel flow situation one kind of panic gamble, this future expectations overdraft will not only affect the current supply and demand structure of the market, will also stock projects and new projects constitute Yamiaozhuzhang type of pressure, thus increasing systemic risk in the industry.
Goverment regulation is expected, but some analysts don't think the second- and third-tier recovery will continue without government support:
Among them, the first-tier cities in the event of strict restriction policy volume is still low levels; second-tier cities to expand the chain volume fell year on year increase narrowed and, in the absence of follow-up policy support, fever has become a major trend; three cities chain volume continued to shrink, an increase sharply narrowed.

Dongxing Securities estimates, more than half to the inventory process has no policy to continue to support the future volume of second and third tier cities will shrink further.
Guoxin sees the market turn at hand though:
May 29, Guoxin Securities said in a report, the current real estate has begun to adjust: First, there has been tightening policy tone, the degree of easy credit also weakened; Second, housing prices have a negative impact on purchasing power; Third, policies and monetary easing will be diminishing marginal effect; four first-tier cities of the property market has been the first signs of correction.

Guoxin Securities, he said, based on historical experience, the recent "frequent the king," or means "market peak adjustment" will appear in the near future.
The spike in land prices is not a market phenomena. In addition to flooding the economy with credit, local governments intentionally restricted land supply in 2015 in order to revive land finance. Even in cities such as Beijing, where nearly all of the prime land has been purchased, there were land supply reductions.

Related from 2015: Ministry of Land and Resources Sees Land Supply Rising in 2H
Beijing Cuts Housing Land Supply By 25%

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