Apart from those well-heeled State magnates, listed companies also propped up the land-shopping spree. In May and June, Vanke invested 8 billion yuan for a total of 3.88 million sq m gross floor area. Just 40 minutes after Greenland acquired the land in Daxing, a nearby plot went to Poly Real Estate at a price of 1.63 billion yuan.

Although commercial property transactions dropped 7 percent in June (from May) in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chongqing, Chengdu and Hangzhou, the top 10 property developers' sales volume climbed by 2 percent to 3.36 million sq m.

"The augmented sales volume over the past months has greatly eased property developers' cash crunch, and also consumed their property reserves. It's natural for them to inject the sales revenue into the land market," said Lu.

"But if we scratch below the surface, we can find other motives behind their craze for land recently," added Lu.

According to Lu, when listed property companies buy new land, the market views such a purchase as positive. As a result, they benefit from a share price rally. For instance, after Vanke and Poly bought new land, both companies' shares soared: Vanke up 71.66 percent to close at 13.99 yuan yesterday, Gemdale up 64.41 percent to 17.74 yuan, and Poly up 26.8 percent to 29.05 yuan.

In addition, when all major developers buy land, they send the public a clear message: housing price will rise, if not skyrocket, again, said Hui Jianqiang, an analyst with Shanghai E-House Research Institute.

"They are returning the ball to the court of potential homebuyers. Buy now or later, it's a question," said Hui.

(China Daily July 23, 2009)