Executive Summary
Key insights from the latest data on China’s local government land sales revenue:
– National land sales revenue fell 14.7% in 2025, but five provinces—Yunnan, Gansu, Ningxia, Xinjiang, and Heilongjiang—recorded growth through存量 land revitalization.
– Economists project a narrowed decline in 2026, with provinces like Guangdong forecasting a 5% increase, while Zhejiang expects a 16.2% drop, indicating heightened regional divergence.
– Structural improvements, such as “good houses” initiatives and land reserve special bonds, are helping optimize land supply and support stabilization.
– Policy measures from central and local governments, including tax incentives and reduced down payments, aim to bolster the real estate market and indirectly stabilize land sales revenue.
– Investors should monitor provincial budget reports and early 2026 data for signs of a sustained recovery in land sales revenue, which is crucial for local government fiscal health.
A Critical Juncture for China’s Land Market
The ebb and flow of land sales revenue in China serve as a vital pulse check for the nation’s real estate sector and local government finances. As 2025 data emerges from 27 provinces, a complex picture of decline, regional resilience, and cautious optimism for stabilization comes into focus. The trajectory of land sales revenue is not merely a statistic; it is a determinant of fiscal space, debt sustainability, and economic stability for provinces navigating a prolonged property market adjustment. This analysis delves into the nuances of the 2025 figures, the structural shifts underway, and the divergent provincial forecasts for 2026, offering actionable insights for global investors attuned to Chinese equity markets.
2025 Land Sales Revenue: A Nationwide Contraction with Notable Exceptions
The overarching narrative for 2025 is one of continued pressure. According to 粤开证券 (Yuekai Securities) research released on April 7, based on public data from local finance departments, 27 of China’s 31 provincial-level regions disclosed their land sales revenue for the year. The national aggregate, as per 财政部 (Ministry of Finance) data, stood at 4.15 trillion yuan, marking a significant 14.7% year-on-year decline. This represents the fourth consecutive year of double-digit decreases since 2022, with the total now 52.3% below the 2021 peak of 8.7 trillion yuan.
Regional Variations: Growth Amidst the Gloom
Despite the national downturn, five provinces managed to achieve positive growth in land sales revenue: 云南 (Yunnan), 甘肃 (Gansu), 宁夏 (Ningxia), 新疆 (Xinjiang), and 黑龙江 (Heilongjiang). 粤开证券 (Yuekai Securities) Chief Economist Luo Zhiheng (罗志恒) attributes this outperformance primarily to vigorous efforts in provincial capitals to revitalize存量 land. By digging into existing land resources, these regions created incremental value. “The overall land market in 2025 presented a pattern of ‘total volume contraction but structural improvement’,” Luo noted. The persistent slump in the commercial housing market, coupled with tight cash flows among developers and their weakened appetite for land acquisition, directly impacted local government income from land sales.
The Structural Shift: From Volume to Quality
In response to pressured real estate demand, local governments proactively optimized land supply structures. Luo Zhiheng (罗志恒) emphasized a转型 towards “缩量提质”—reducing quantity while improving quality. 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. For instance, Guangdong’s land sales revenue fell 11.0% in 2025, but this decline was 17.9 percentage points narrower than in 2024. This trend underscores a broader move towards efficiency and value maximization in land resource management.
The “Good Houses” Initiative: A Catalyst for Quality Land Sales
One of the key drivers behind the improving quality of land transactions is the national push for “好房子” (good houses). In 2025, several first- and second-tier cities supported this initiative by increasing the supply of high-quality residential land with lower plot ratios. This strategic move led to more transactions of high-premium land parcels, enhancing developer interest and boosting land sales revenue in specific locales.
Metropolitan Success Stories
Cities like 深圳 (Shenzhen), 成都 (Chengdu), 杭州 (Hangzhou), and 青岛 (Qingdao) demonstrated this effect. Shenzhen witnessed a remarkable 52% year-on-year surge in land sales revenue, driven by high-premium residential land deals and a substantial increase in industrial land supply. Chengdu and Hangzhou, by boosting residential land supply in core urban areas and relaxing plot ratio restrictions, also contributed to growth. These cases highlight how targeted supply-side policies can positively influence land sales revenue even in a broader downtrend.
Revitalizing存量 Land: The昆明 and兰州 Models
The success of provinces like Yunnan and Gansu was largely fueled by their capital cities. 昆明市 (Kunming) accelerated the utilization of approved-but-unused and idle land, increasing supply for infrastructure and public services. This effort resulted in a 61.6% jump in the city’s land sales revenue. Similarly, 兰州市 (Lanzhou) effectively used funds from土地储备专项债 (land reserve special bonds) to revitalize idle land resources, leading to a 19.5% increase in city-level land sales revenue and helping pull Gansu province’s growth rate into positive territory. These models underscore the critical role of存量 land盘活 in stabilizing local land markets.
2026 Outlook: Diverging Provincial Forecasts and Early Indicators
The outlook for land sales revenue in 2026 is characterized by significant provincial divergence, though a national stabilization is anticipated. Luo Zhiheng (罗志恒) told第一财经 (Yicai) that while a decline is expected to continue, the magnitude is likely to narrow. This view is corroborated by central and local budget reports, which provide official forecasts for the year ahead.
Budget Reports Paint a Mixed Picture
The国务院 (State Council) budget report for 2026 projects national local government性基金预算本级收入 (government-managed fund budget revenue) to be roughly flat year-on-year at 5.26 trillion yuan. Given that land sales revenue constitutes nearly 80% of this total, this implies an official expectation for land sales revenue to stop falling. Provincial forecasts, however, vary widely:
– 广东 (Guangdong) expects its land sales revenue to reach 253.66 billion yuan, a 5% increase.
– 河南 (Henan) forecasts its government-managed fund revenue at 248.46 billion yuan, surging 57%.
– 河北 (Hebei) anticipates约 22% growth to 224.97 billion yuan.
– In contrast, 浙江 (Zhejiang) projects a 16.2% decline in its government-managed fund revenue to 491.842 billion yuan.
This disparity underscores the uneven recovery and the heightened importance of regional analysis for investors assessing exposure to different provincial economies.
Interpreting Early 2026 Data
财政部 (Ministry of Finance) data for the first two months of 2026 shows continued pressure: land sales revenue fell 25.2% year-on-year to 354.7 billion yuan. This decline is wider than both the 15.9% drop in the same period last year and the full-year 2025 decrease of 14.7%. However, economists caution that this data is lagging. There is typically a delay between developers signing land purchase contracts and actual funds entering the state treasury, meaning the early 2026 figures largely reflect land transaction conditions from the second half of 2025. Therefore, subsequent months’ data will be more telling for the true 2026 trend in land sales revenue.
Policy Arsenal: Stabilizing the Real Estate and Land Markets
The future path of land sales revenue is inextricably linked to the health of the real estate market. Since the start of 2026, a series of stabilizing policies have been rolled out from both central and local authorities, aiming to restore confidence and demand.
Central Government Measures
In January 2026, 财政部 (Ministry of Finance) and other departments announced an extension of the personal income tax policy supporting home replacement—originally set to expire at the end of 2025—for another two years to the end of 2027. Simultaneously, the中国人民银行 (People’s Bank of China) and other regulators reduced the minimum down payment ratio for commercial property loans to 30%, aiming to help deplete inventory in the commercial and office real estate market. These demand-side stimulants are designed to improve market sentiment, which is a prerequisite for a recovery in developer land acquisition and, consequently, land sales revenue.
Local Innovations and Fiscal Recommendations
Local governments have also been active, implementing measures such as lowering home purchase thresholds, optimizing公积金 (housing provident fund) policies, increasing tax incentives, and offering fiscal subsidies. These actions aim to激活 demand and optimize housing supply structure. From a fiscal perspective, Luo Zhiheng (罗志恒) recommends enhancing financial support to local governments to regulate land supply at its root. He suggests that the中央财政 (central government) could compensate for the sharp reduction in land sales revenue by increasing transfer payments or further raising local government debt quotas. This would provide local authorities with greater fiscal space to control unnecessary land supply and advance the repurchase of idle存量 land, thereby helping to rebalance market supply and demand.
Implications for Investors and the Path Forward
The dynamics of land sales revenue carry profound implications for China’s economic landscape and investment strategies. The continued, albeit moderating, decline affects local government可用财力 (available financial resources), increasing偿债压力 (debt repayment pressure) and potentially constraining infrastructure and public service spending. For investors, understanding provincial variances is key.
Monitoring Key Indicators
Sophisticated market participants should closely track monthly land sales revenue data releases from the财政部 (Ministry of Finance), along with land auction activity in key cities. The performance of developers with strong balance sheets and a focus on core cities benefiting from “good houses” policies may offer relative resilience. Furthermore, the effective deployment of土地储备专项债 (land reserve special bonds) can be a leading indicator for存量 land revitalization and potential future revenue streams for local governments.
Synthesis and Strategic Guidance
The year 2025 confirmed that the era of relentless growth in land sales revenue is over, but it also revealed a market in transition. The focus has decisively shifted from quantity to quality, from greenfield expansion to存量 optimization. While the national figure for land sales revenue remains under pressure, green shoots are visible in provinces and cities that have successfully adapted. The outlook for 2026 points to a year of stabilization at the national level, but with intensified regional winners and losers. The convergence of targeted supply-side management, demand-stimulating policies, and potential central fiscal support creates a framework for a gradual market normalization. For global investors, a nuanced, province-specific approach is essential. Prioritize regions demonstrating fiscal innovation and effective land resource management, as these are likely to see earlier and more sustainable stabilization in their land sales revenue—a critical factor for long-term regional economic health and investment attractiveness.