(Yicai) Oct. 11 -- The revenue that local governments in China raised from selling land-use rights in the January to September period fell 20 percent compared with a year earlier, according to a new report, as developers grow increasingly cautious amid an uncertain outlook for the nation’s property market.

Income from sales of land-use rights in Qinghai, Gansu, and Xinjiang Uygur Autonomous Region more than halved in the nine months ended Sept. 30, according to the report by analysts at Beijing-based investment bank Minsheng Securities. 

Revenues in Fujian, Shandong, Hubei, Anhui, Hunan, Chongqing, Shaanxi, Inner Mongolia Autonomous Region, and Guizhou plunged over 40 percent, while they fell more than 30 percent in Jilin and over 20 percent in Henan, Liaoning, and Shanxi.

Only Tianjin, Ningxia, Jiangsu, Beijing, and Zhejiang made gains, logging increases of 122 percent, 79 percent, 10 percent, 3 percent, and 1 percent, respectively, according to the report.

The sale of land usage rights is one of the most important sources of revenue for local governments in China. The total figure was CNY6.7 trillion (USD921 billion) last year, down 23 percent from CNY8.7 trillion in 2021.

Though the land market picked up in some places last quarter from the previous three months, it is still weakening compared with the same period of last year, the report noted. Since the third quarter, regulators and local governments have introduced favorable policies to boost confidence in the property sector, but the market is still under pressure nationwide, and the finances of builders have yet to improve, it added.

Beijing, Shanghai, and Hangzhou were the only key cities with nine-month revenues from land auctions of more than CNY100 billion (USD13.7 billion), fewer than the number in previous years. Guangzhou and Chengdu had incomes of CNY94.6 billion and CNY91.9 billion to rank fourth and fifth.

The land bought by the top 100 developers in the first three quarters fell almost 18 percent to CNY859.9 billion, according to figures from real estate data and analytics service provider China Index Holdings.

The sector has entered a cyclical adjustment period, an industry insider pointed out, leading to lower revenues from land-use rights sales, thereby paring the contribution these sales make to local government finances.

Any turnaround remains dependent on a recovery in property sales, China Index noted. Driven by favorable policies, land auctions in core cities are expected to improve, with high-quality plots staying popular, it said.

Editor: Martin Kadiev