27 provinces disclose last year's land sale revenue, with many regions expecting stabilization after a decline this year

Asking AI · How to Revitalize Existing Land to Promote Countercyclical Growth in Land Revenue Across Five Provinces?

Affected by the ongoing downturn in the real estate market, the national land transfer income (hereinafter referred to as “land transfer income”) of local governments across China is expected to decline overall in 2025, but there are still differences among provinces.

A research report released by Yuekai Securities on April 7 shows that, based on publicly available data from local finance departments, among the 31 provinces in China, excluding Shanxi, Inner Mongolia, Liaoning, and Tibet, 27 provinces disclosed their land transfer income for 2025. Among these, Yunnan, Gansu, Ningxia, Xinjiang, and Heilongjiang saw growth in land transfer income last year, while the other 22 provinces experienced declines.

Yuekai Securities’ Chief Economist Luo Zhiheng stated that last year, Yunnan, Gansu, and Ningxia led the country in land transfer income growth, mainly due to provincial capital cities actively revitalizing existing land resources and extracting incremental value from stock resources. Overall, the land market in 2025 shows a pattern of “total contraction with structural improvement.” The sluggishness in the commercial housing market continues to impact land sales, compounded by tight cash flows for real estate companies and low willingness to acquire land, directly affecting local government land transfer income. He predicts that although land transfer income will still decline in 2026, the rate of decline may narrow.

“Good Housing” Construction Supports Growth

According to data from the Ministry of Finance, in 2025, local government land transfer income was 4.15 trillion yuan, down 14.7% year-on-year. This marks the fourth consecutive year of double-digit decline since 2022. Compared to the peak of local land transfer income in 2021 (8.7 trillion yuan), the income in 2025 decreased by about 4.6 trillion yuan, a decline of 52.3%.

Luo Zhiheng said that under the pressure of real estate demand, local governments actively revitalized stock land and optimized land supply structures last year, promoting a transformation of the land market toward “reducing volume but improving quality.” For example, major economic provinces like Guangdong, Zhejiang, and Sichuan saw their land transfer income narrow their declines after deep adjustments. Provinces focused on “exploiting stock” by issuing large amounts of land reserve bonds, reclaiming and re-planning idle land, and increasing land resource value.

Data summarized in the Yuekai Securities report shows that among the 22 provinces with year-on-year declines in land transfer income in 2025, 12 provinces saw their decline rates narrow. For example, Guangdong, Zhejiang, and Sichuan saw their land transfer income decrease by 11.0%, 7.9%, and 1.1% respectively, with the decline rates narrowing by 17.9, 19.1, and 18.4 percentage points compared to 2024.

Luo Zhiheng said that last year, some first- and second-tier cities supported “good housing” construction by increasing supply of high-quality residential land with low plot ratios, leading to more high-premium land transactions and boosting land transfer income. For example, Shenzhen saw a high premium on residential land transactions last year, coupled with a significant increase in industrial land supply, resulting in a 52% year-on-year increase in land transfer income. Cities like Chengdu, Hangzhou, and Qingdao increased core urban residential land supply and relaxed plot ratio restrictions to promote growth in land transfer income.

He noted that some provincial capitals actively revitalized stock land last year, driving growth in land transfer income. For instance, Kunming accelerated the utilization of approved but unissued and idle land, increasing infrastructure and public service land supply, with land transfer income rising by 61.6%, including a 78.8% increase in allocated land revenue, accounting for nearly half of the city’s total land transfer income. Lanzhou effectively used special land reserve bonds to revitalize idle land resources, promoting a sustained recovery in the land market, with land transfer income up 19.5% year-on-year, turning the growth rate positive for Gansu.

Divergence to Widen This Year

The deep adjustment in the real estate market continues to impact local finances. Luo Zhiheng told First Finance that the deep downturn in the real estate market directly causes persistent declines in land transfer income, reducing local fiscal capacity and increasing debt repayment pressures. He expects that land transfer income will continue to decline in 2026, but the decline rate may narrow.

This trend is also reflected in the central and local budget reports released this year.

According to the report submitted by the State Council in March on the implementation of the 2025 central and local budgets and the draft for 2026, the total revenue of local government fiscal funds in 2026 is expected to be 5.26 trillion yuan, roughly unchanged from the previous year.

Since land transfer income accounts for nearly 80% of local government fiscal fund revenue, the expectation that the total local government fund revenue will remain stable also indirectly indicates that official forecasts expect land transfer income to stabilize this year.

Projections for land transfer income growth vary significantly among provinces this year, with some expecting increases and others continuing to decline.

According to local finance departments’ budget reports, Guangdong expects local land transfer income to reach 253.66 billion yuan in 2026, a 5% increase. Henan projects local government fund revenue at 248.46 billion yuan, up 57%. Hebei expects 224.97 billion yuan, an increase of about 22%. Jiangxi’s local government fund revenue is forecasted at 162.45 billion yuan, up 2%.

Conversely, some provinces anticipate declines. For example, Zhejiang’s budget report shows that the province’s government fund revenue in 2026 is expected to be 41.5k yuan, a decrease of 16.2%.

Data from the first two months of this year show that the land market remains under pressure.

The Ministry of Finance reports that in the first two months, land transfer income was 354.7 billion yuan, down 25.2% year-on-year. This decline is larger than the -15.9% decrease in the same period last year and exceeds the full-year decline of 14.7% in 2024.

However, since it generally takes some time for land developers to transfer contract payments into actual funds deposited into the treasury, the land transfer income data from the first two months mainly reflect land transactions from the second half of last year. Therefore, subsequent changes in land transfer income still need to be observed.

Clearly, this year’s land transfer income situation will be closely linked to the future trajectory of the real estate market. Since the beginning of the year, policies to stabilize the housing market have continued to be rolled out from central to local governments.

For example, in January, the Ministry of Finance and other agencies extended the personal income tax policies supporting residents’ home exchanges, originally set to expire at the end of 2025, by two years to the end of 2027. The central bank and others lowered the minimum down payment ratio for commercial housing loans to 30%, supporting the destocking of commercial and office real estate markets.

This year, some localities have also activated demand by lowering home purchase thresholds, optimizing housing provident fund policies, increasing tax and fee incentives, providing fiscal subsidies, and adjusting housing supply structures to stabilize the local housing market.

Luo Zhiheng recommends increasing fiscal support to local governments this year, fundamentally regulating land supply. To address the sharp decline in land transfer income caused by the downturn in real estate, he suggests that the central government increase transfer payments or further raise local government debt limits. This would give local governments greater fiscal space, help control and reduce unnecessary land supply, and actively promote repurchase of idle stock land, thereby correcting market supply-demand imbalances.

(This article is from First Finance)