(Yicai Global) May 22 -- Chinese local governments’ revenue from land auctions, which has been tumbling for over a year, almost logged growth last month, but economists believe that the land market is still weak.
Local government revenue from the sale of land-use rights dipped 0.7 percent in April from a year ago to CNY303.3 billion (USD43.2 billion), the smallest decline since December 2021, according to recent data from the Ministry of Finance.
The fall in revenue from land sales narrowed significantly last month from a year ago because of the low base line in the same period in 2022, said Gao Ruidong, chief macroeconomist at Everbright Securities. But it was still 21.5 percent below the average over the same period of the past two years, indicating that demand remains slow, he added.
The revenue from land sales reflects late in financial statistics, so last month’s figures show an uptick in the land market in the first quarter, said Zhao Wei, chief economist at Sinolink Securities.
China’s real estate industry has been sluggish since the second half of 2021 and developers are unwilling to buy land. In the first four months, revenue from land sales plunged 21.7 percent year on year to CNY1.2 trillion (USD170.8 billion) and last year it plummeted 23.3 percent from the year before.
The price of land in major cities has slumped further this month probably because of seasonal factors and a slowdown in property sales, Zhao said. Housing transactions and land auction data need to be closely watched in order to predict the future direction of local governments’ revenue from land sales.
Editors: Dou Shicong, Kim Taylor