(Yicai) May 22 -- Local governments across China are ramping up their efforts to buy up unused land, in a bid to ease the financial pressure on cash-strapped developers and help stabilize the country’s sluggish property market.

Chinese local governments have increased their use of special-purpose bonds to purchase idle land and have so far announced land acquisition and reserve projects worth more than CNY350 billion (USD48.6 billion), according to a report released today by the China Index Academy.

Nearly 3,000 land reserve projects across the country had been announced as of May 20, with a total area of more than 133 million square meters, the report said.

More than half of these were made public in April at 1,581 projects, involving 72.7 million sqm of land and an amount of CNY176.9 billion (USD24.5 billion), indicating a clear acceleration in land repurchases from the previous three months.

In recent years, many developers have been unable to move forward with land they previously bought due to a lack of cash amid a cooling property market. This has left large amounts of land sitting idle. To revitalize this land and ease the financial pressure on developers, the government said in October last year that it will resume the issuance of special bonds for land reserves.

This is not the first time China has used this approach. Back in 2017, a pilot program was launched allowing local governments to use bond funds for land purchases and pre-development. However, this was paused in 2019 to redirect more funds towards infrastructure.

Twenty-three provincial-level regions have disclosed land purchase and reserve plans so far, according to the China Index Academy. Guangdong, the province with the biggest economy, has the largest budget at CNY65 billion (USD9 billion). It is followed by central Henan province with CNY41 billion (USD5.7 billion) and southeastern Fujian province with CNY35 billion.

Guangdong was also the first province to issue this type of bond earlier this year after the relaunch. It issued two special bonds worth a combined CNY30.7 billion (USD4.3 billion) in February and it currently leads the country in terms of bond issuance for land reserves.

So far, about CNY55 billion (USD7.6 billion) of these special bonds have been issued, amounting to roughly 15 percent of the total value of disclosed land acquisitions projects. The pace of bond issuance will need to speed up to keep up with planned land purchases, the report added.

Editor: Kim Taylor