China govt land sales revenue drops in September, drags on recovery

CHINA’S government land sales revenue fell for a 21st month in September, data from the finance ministry showed on Tuesday (Oct 24), adding to the woes of local governments already struggling with mounting debt repayments.

Land sales revenues in September fell 21.3 per cent from a year earlier, after falling 22.2 per cent the previous month, according to Reuters calculations based on the ministry’s data.

For the January-September period, sales were down 19.8 per cent from a year earlier to 3.0875 trillion yuan (S$577.9 billion).

Land sales, a key barometer tracking property sector momentum and local fiscal conditions, continue to take a hit from the sluggish housing market with falls in home prices, property sales and investment.

Authorities in the past weeks have rolled out a flurry of measures to revive the sector, with some tier-one cities showing early signs of recovery. However, the policies offered only a small boost in sentiment and markets are thirsty for larger-scale policy support.

Beijing has also tightened its scrutiny of local governments’ financing vehicles, with cities rushing to issue bonds for debt repayment to mitigate debt woes, which now pose a major risk to economic stability. REUTERS