(Yicai) Feb. 26 -- Revenue from the sale of land use rights tumbled across China last year due to a sluggish real estate market and a slowdown in macroeconomic growth, impacting local governments' fiscal revenue, according to a recent research report.

Only five out of 28 provincial-level regions saw an uptick in land sales last year, according to a report published by Yuekai Securities Research Institute today, citing local government data. The governments of northern Shanxi province, northeastern Liaoning province and Xizang Autonomous Region had not released their land transfer data for last year as of Feb. 23.

One provincial-level region saw its revenue from land sales stay flat and the remaining 22 all posted a decline, the report said. Revenue plunged more than 20 percent year on year in nine of these regions.

Jiangsu province in the east of the country topped the list with land sales worth CNY948.2 billion (USD131.7 billion), even though this was a 11.3 percent dive in revenue from the previous year, according to the report.

Zhejiang province, also in the east, ranked second with CNY647 billion (USD89.9 billion), but this was a 22.4 percent drop from the year before. Shandong, Sichuan and Guangdong provinces ranked third to fifth followed by the city of Shanghai in sixth place.

The coastal provincial-level regions have well-developed economies and there is strong demand for land, said Luo Zhiheng, chief economist and dean of Yuekai Securities. Therefore they have the most income from land sales.

The central provinces, on the other hand, are catching up quickly thanks to a fast-growing economy.

Although land revenue continued to slide in most provinces last year, the decline slowed in 20 provincial-level regions compared with 2022, and the drop in national land revenue also narrowed significantly from 2022, Luo said.

But revenue from land sales in the eastern, coastal provinces tumbled more than the national average. Shandong province’s revenue plummeted 23 percent last year, that of Zhejiang province by 22.4 percent, and that of Guangdong province by 18.2 percent. And it is likely to continue to slide this year.

Most provincial governments are bracing for further falls in land auction revenue this year, according to their 2024 budget reports. Eastern Jiangsu province, for instance, expects its income from land sales to sink 15.6 percent, while eastern Zhejiang province and southwestern Sichuan province expect it to dive 7.7 percent and 11.4 percent respectively.

However, Guangdong province anticipates land sales revenue to climb 2 percent this year, and Shandong province is forecasting it to edge up 0.1 percent.

The rolling out of more supportive policies will help the housing and land market to gradually stabilize, Luo said. The real estate market should start to bottom out, which will help boost market confidence and promote land sales.

After reaching a record high of CNY8.7 trillion (USD1.2 trillion) in 2021, local governments’ land sales revenue slumped 13.2 percent in 2023 from a year earlier to CNY5.8 trillion (USD805.8 billion), and in 2022 it tumbled 23.3 percent year on year to CNY6.7 trillion (USD930.6 billion), according to Ministry of Finance data.

Editors: Tang Shihua, Kim Taylor