– 27 out of 31 Chinese provinces disclosed 2025 land sales revenue, with only five showing growth amid a nationwide decline, underscoring the property market’s prolonged slump.
– Expert analysis points to a “contraction in volume, improvement in structure” trend, driven by local government efforts to revitalize existing land resources and optimize supply.
– Provincial forecasts for 2026 vary widely, with some expecting growth while others anticipate further declines, highlighting regional divergence and the potential for land sales revenue stabilization.
– Policy measures, including extended tax breaks and relaxed loan requirements, aim to stabilize the property market and support local government finances.
– Recommendations for increased central fiscal transfers to offset revenue shortfalls could help control land supply and manage idle plots, fostering market balance.
China’s local government finances are heavily reliant on revenue from land sales, making fluctuations in this income stream a top concern for investors and policymakers alike. The year 2025 saw the fourth consecutive annual double-digit drop in nationwide land sales revenue, painting a grim picture for many provinces. However, beneath the surface, strategic shifts in land management and targeted policy support are laying the groundwork for potential land sales revenue stabilization in the coming year. This analysis delves into the provincial data, expert insights, and policy maneuvers shaping the future of this critical fiscal pillar, with a focus on the emerging signs of recovery and the challenges ahead.
2025 Land Sales Revenue: A National Overview with Provincial Nuances
The national aggregate for local government land sales revenue, officially termed 国有土地使用权出让收入 (land use right transfer income), fell to 4.15 trillion yuan in 2025, a 14.7% year-on-year decline according to 财政部 (Ministry of Finance) data. This marks four straight years of double-digit decreases since 2022, and a staggering 52.3% drop from the 2021 peak of 8.7 trillion yuan. The pressure stems from the prolonged downturn in the residential property market, which has dampened developer appetite for new land acquisitions and tightened their cash flows, directly impacting local fiscal health.
Disparate Provincial Performance in 2025
A recent report by 粤开证券 (Yuekai Securities) released on April 7梳理 (collated) data from provincial finance departments, showing that 27 of China’s 31 provinces disclosed their 2025 land sales revenue. Only five provinces – 云南 (Yunnan), 甘肃 (Gansu), 宁夏 (Ningxia), 新疆 (Xinjiang), and 黑龙江 (Heilongjiang) – recorded growth. The remaining 22 experienced declines. 粤开证券首席经济学家罗志恒 (Luo Zhiheng, Chief Economist at Yuekai Securities) notes that the leaders, namely Yunnan, Gansu, and Ningxia, benefited primarily from their provincial capitals vigorously revitalizing存量土地 (existing land stock), extracting incremental value from dormant resources. This highlights the uneven landscape where localized strategies are beginning to mitigate broader market headwinds.
The “Contraction in Volume, Improvement in Structure” Paradigm
罗志恒 (Luo Zhiheng) characterizes the 2025 land market as exhibiting a pattern of “总量收缩、结构改善” (total volume contraction, structural improvement). While the商品房市场 (commercial housing market) slump continues to weigh on land demand, local governments have actively optimized supply structures. Major economic provinces like 广东 (Guangdong), 浙江 (Zhejiang), and 四川 (Sichuan) saw the rate of decline in their land sales revenue narrow significantly after deep adjustments, indicating early signs of market bottoming. For instance, Guangdong’s revenue fell by 11.0%, but this was a 17.9-percentage-point improvement from 2024’s decline, suggesting incremental progress toward land sales revenue stabilization.
The “Good Housing” Drive as a Catalyst for Quality Land Sales
In response to market pressures, a strategic shift towards “好房子” (“good housing”) construction has emerged. This initiative involves supplying higher-quality residential land with lower plot ratios, which has attracted developer interest and commanded premium prices in some markets, contributing to revenue gains in select areas. By focusing on quality over quantity, authorities aim to enhance land value and stimulate demand, which is crucial for achieving land sales revenue stabilization in the long term.
Success Stories from Key Cities
罗志恒 (Luo Zhiheng) points to cities like 深圳 (Shenzhen), where increased supply of industrial land and high-premium residential plot sales drove a 52% surge in municipal land sales revenue. Similarly, 成都 (Chengdu), 杭州 (Hangzhou), and 青岛 (Qingdao) boosted revenues by increasing宅地 (residential land) supply in core urban areas and relaxing plot ratio restrictions. The revitalization of存量土地 (existing land stock) has been pivotal. For example, 昆明 (Kunming) accelerated the utilization of approved-but-unused and idle land, leading to a 61.6% jump in land sales revenue, nearly half of which came from划拨土地 (allocated land) income. 兰州 (Lanzhou) effectively used土地储备专项债 (land reserve special bond) funds to activate idle resources, propelling Gansu’s provincial revenue into positive growth territory. These cases demonstrate how targeted urban policies can drive local recovery.
2026 Outlook: Intensifying Divergence and the Path to Stabilization
The outlook for 2026 remains cautious yet hints at incremental improvement. 罗志恒 (Luo Zhiheng) expects the downward trend in land sales revenue to persist but with a narrowing decline, signaling a potential turning point toward land sales revenue stabilization. This forecast aligns with broader fiscal projections. The State Council’s budget report anticipates全国地方政府性基金预算本级收入 (national local government fund budget revenue) to remain flat in 2026 at approximately 5.26 trillion yuan. Given that land sales constitute nearly 80% of this fund revenue, this implies an official expectation for stabilization this year, though regional variations will be pronounced.
Provincial Budget Forecasts Reveal a Mixed Bag
Provincial budget reports for 2026 showcase widely varying expectations, reflecting the fragmented recovery:
– 广东 (Guangdong) projects its land sales revenue to reach 253.66 billion yuan, a 5% increase.
– 河南 (Henan) expects its government fund revenue to hit 248.46 billion yuan, surging by 57%.
– 河北 (Hebei) forecasts fund revenue of 224.97 billion yuan, up about 22%.
– 江西 (Jiangxi) anticipates fund revenue of 162.45 billion yuan, a 2% rise.
In contrast, 浙江 (Zhejiang) predicts a 16.2% drop in its government fund revenue to 491.842 billion yuan, highlighting the regional disparities that complicate nationwide land sales revenue stabilization efforts.
Early 2026 Data and the Lag Effect
Preliminary data for January-February 2026 from 财政部 (Ministry of Finance) shows land sales revenue at 354.7 billion yuan, down 25.2% year-on-year. This decline is steeper than the 15.9% drop in the same period last year and the full-year 2025 decline of 14.7%. However, it’s crucial to note the inherent lag in this data; revenue collection often trails land sale contracts by several months. Thus, these figures largely reflect market conditions from late 2025, and subsequent months will provide a clearer picture of whether land sales revenue stabilization is taking hold. Investors should monitor upcoming quarterly reports for more timely signals.
Policy Arsenal: Sustained Efforts to Bolster the Property and Land Markets
The trajectory for land sales revenue in 2026 is inextricably linked to the performance of the broader property market. Authorities have rolled out a series of stabilizing measures since the start of the year, aiming to stimulate demand and improve supply dynamics. These policies are essential for creating an environment conducive to land sales revenue stabilization, as they address both consumer confidence and developer liquidity issues.
Central and Local Policy Interventions
At the central level, key policies include:
– The extension of the personal income tax benefit for home swaps until the end of 2027, jointly announced by 财政部 (Ministry of Finance) and other agencies.
– The reduction of the minimum down payment ratio for commercial housing loans to 30% by the中国人民银行 (People’s Bank of China) and other regulators to facilitate inventory reduction.
Locally, cities are employing tools like lower purchase thresholds, optimized公积金 (housing provident fund) policies, increased tax incentives, and direct subsidies to stimulate demand and improve housing supply structure. For example, many municipalities have introduced tailored support packages to attract buyers and developers, which could gradually feed into higher land transaction volumes.
Expert Analysis and Strategic Recommendations for Fiscal Sustainability
The sustained decline in land sales revenue poses significant challenges to local fiscal health, reducing available财力 (fiscal capacity) and increasing debt repayment pressures. 罗志恒 (Luo Zhiheng) emphasizes that without intervention, these trends could undermine long-term economic stability, making the pursuit of land sales revenue stabilization a top priority for policymakers at all levels.
罗志恒 (Luo Zhiheng)’s Prescription for Market Balance
罗志恒 (Luo Zhiheng) recommends enhanced central fiscal support to tackle the root cause. He suggests that the central government compensate for the sharp fall in local land revenue through increased转移支付 (transfer payments) or higher local government debt quotas. This would provide local governments with greater fiscal space to fundamentally control and reduce non-essential land supply, while vigorously推进 (advancing) the repurchase of idle存量土地 (existing land). Such measures could help correct market supply-demand imbalances and create conditions for sustainable land sales revenue stabilization. By addressing the fiscal incentives behind land sales, authorities can foster a more balanced and resilient market framework.The journey towards land sales revenue stabilization in China is underway, marked by stark provincial contrasts and strategic policy calibrations. While 2025 data confirms the enduring pressure from the property downturn, the proactive management of land resources and targeted “good housing” initiatives are seeding recovery in select regions. The divergent provincial forecasts for 2026 underscore that stabilization will be uneven and highly dependent on local execution and market responsiveness. For investors and policymakers, the key takeaway is the critical interplay between property market health, local fiscal policy, and central support mechanisms. Monitoring the rollout and effectiveness of stabilization policies in the coming quarters will be essential to gauge the durability of any emerging land sales revenue stabilization trend. As the market seeks equilibrium, a focus on quality over quantity in land supply, coupled with robust fiscal backstops, may well define the new normal for China’s local government finances. Stay informed by tracking official announcements and expert analyses to navigate this evolving landscape effectively.