China's Land Finance Waterloo: Q1 Local Land Sale Revenue Down 24.4% Year-on-Year
China's local government land sale revenue plummeted by 24.4% year-on-year in Q1 2026, with the decline significantly widening. This is primarily due to the sluggish real estate market and changes in local government land supply strategies.
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- 📰 Published: April 28, 2026 at 11:49
- 🔍 Collected: April 28, 2026 at 12:01 (12 min after Published)
- 🤖 AI Analyzed: April 28, 2026 at 12:11 (10 min after Collected)
Central News Agency
(Central News Agency reporter Lee Ya-wen, Shanghai, 28th) China's local government finances rely heavily on land sale revenue. In the first quarter of this year, under circumstances such as a "high-frequency, small-volume" land supply rhythm, low willingness of real estate enterprises to acquire land, and a relatively high base from last year, China's local government land transfer revenue decreased by 24.4% year-on-year, with the decline significantly expanding.
Latest data from China's Ministry of Finance shows that among the local government fund budget revenues in the first quarter of this year, revenue from the transfer of state-owned land use rights (land transfer revenue) was 517.6 billion yuan (approximately NT$2.38 trillion), a year-on-year decrease of 24.4%. The decline rate expanded compared to the first quarter of 2025 (-15.9%) and the full year of 2025 (-14.7%).
Yan Yuejin, Deputy Director of Shanghai E-House Real Estate Research Institute, stated in an interview with China Business News that the decline in land transfer revenue in the first quarter of this year was the result of a combination of factors: a high-frequency, small-volume land supply rhythm, low willingness of real estate enterprises to acquire land, and a relatively high base from last year.
Yan Yuejin stated that local governments no longer conduct large-scale land transfers as they did during the concentrated land supply period. Governments across various regions generally adjust their land supply rhythm, shifting from large-batch concentrated transfers to a high-frequency, small-volume model, to adapt to real estate enterprises' limited capital capacity and precise investment needs; real estate enterprises' investment strategies tend to be highly cautious, focusing on safe plots in first-tier and core second-tier cities, with flexible and diversified land acquisition rhythms.
Yan Yuejin analyzed that after the series of policies to stabilize the real estate market were introduced in the fourth quarter of 2024, they boosted land transfer revenue in the first quarter of 2025, raising the base. The relatively high base made the decline in land transfer revenue expand in the first quarter of this year; as the low base effect gradually appears from the second quarter of this year, the decline rate will show a technical marginal convergence.
The decline in China's local government land transfer revenue has reduced available revenue, leading to fiscal revenue and expenditure difficulties for local governments.
Li Rong, Professor at the School of Finance and Taxation of Renmin University of China, stated at an academic seminar on "China's Fiscal Operations Analysis in the First Quarter" that the past growth model of local governments relying on land finance to increase investment for stability is no longer suitable for the current situation. Local governments need to change their development model and methods of generating fiscal revenue, such as activating state-owned capital and assets.
To offset the impact of reduced land transfer revenue, local governments have in recent years intensified efforts to activate existing assets and resources, leading to an increase in non-tax revenue. Data from the Ministry of Finance shows that national non-tax revenue was approximately 2.98 trillion yuan in 2021; it increased to 3.97 trillion yuan in 2025. This change mainly comes from the growth in revenue from the compensated use of state-owned resources and assets and revenue from state-owned capital operations.
The main reason for the decline in China's local government land sale revenue is still the sluggish real estate market. China's local land transfer revenue reached a historical peak of 8.7 trillion yuan in 2021; affected by the real estate downturn, local land sale revenue showed a "decline in both volume and price," falling to 4.2 trillion yuan in 2025, a halving from its peak. (Editor: Chang Shu-ling) 1150428
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(Central News Agency reporter Lee Ya-wen, Shanghai, 28th) China's local government finances rely heavily on land sale revenue. In the first quarter of this year, under circumstances such as a "high-frequency, small-volume" land supply rhythm, low willingness of real estate enterprises to acquire land, and a relatively high base from last year, China's local government land transfer revenue decreased by 24.4% year-on-year, with the decline significantly expanding.
Latest data from China's Ministry of Finance shows that among the local government fund budget revenues in the first quarter of this year, revenue from the transfer of state-owned land use rights (land transfer revenue) was 517.6 billion yuan (approximately NT$2.38 trillion), a year-on-year decrease of 24.4%. The decline rate expanded compared to the first quarter of 2025 (-15.9%) and the full year of 2025 (-14.7%).
Yan Yuejin, Deputy Director of Shanghai E-House Real Estate Research Institute, stated in an interview with China Business News that the decline in land transfer revenue in the first quarter of this year was the result of a combination of factors: a high-frequency, small-volume land supply rhythm, low willingness of real estate enterprises to acquire land, and a relatively high base from last year.
Yan Yuejin stated that local governments no longer conduct large-scale land transfers as they did during the concentrated land supply period. Governments across various regions generally adjust their land supply rhythm, shifting from large-batch concentrated transfers to a high-frequency, small-volume model, to adapt to real estate enterprises' limited capital capacity and precise investment needs; real estate enterprises' investment strategies tend to be highly cautious, focusing on safe plots in first-tier and core second-tier cities, with flexible and diversified land acquisition rhythms.
Yan Yuejin analyzed that after the series of policies to stabilize the real estate market were introduced in the fourth quarter of 2024, they boosted land transfer revenue in the first quarter of 2025, raising the base. The relatively high base made the decline in land transfer revenue expand in the first quarter of this year; as the low base effect gradually appears from the second quarter of this year, the decline rate will show a technical marginal convergence.
The decline in China's local government land transfer revenue has reduced available revenue, leading to fiscal revenue and expenditure difficulties for local governments.
Li Rong, Professor at the School of Finance and Taxation of Renmin University of China, stated at an academic seminar on "China's Fiscal Operations Analysis in the First Quarter" that the past growth model of local governments relying on land finance to increase investment for stability is no longer suitable for the current situation. Local governments need to change their development model and methods of generating fiscal revenue, such as activating state-owned capital and assets.
To offset the impact of reduced land transfer revenue, local governments have in recent years intensified efforts to activate existing assets and resources, leading to an increase in non-tax revenue. Data from the Ministry of Finance shows that national non-tax revenue was approximately 2.98 trillion yuan in 2021; it increased to 3.97 trillion yuan in 2025. This change mainly comes from the growth in revenue from the compensated use of state-owned resources and assets and revenue from state-owned capital operations.
The main reason for the decline in China's local government land sale revenue is still the sluggish real estate market. China's local land transfer revenue reached a historical peak of 8.7 trillion yuan in 2021; affected by the real estate downturn, local land sale revenue showed a "decline in both volume and price," falling to 4.2 trillion yuan in 2025, a halving from its peak. (Editor: Chang Shu-ling) 1150428
Choose to stand with facts. Your every sponsorship is the power to protect press freedom.
Download the Central News Agency "First-Hand News" APP to grasp the latest news in real-time.
The text, images, and videos on this website may not be reproduced, publicly broadcast, publicly transmitted, or used without authorization.