China’s real estate market is stagnant, with a continuous decline in land financial revenue. On Monday, the Ministry of Finance of the Chinese Communist Party released data showing a 10.4% year-on-year decrease in land transfer revenue from January to April.
On May 20, the Ministry of Finance of the Chinese Communist Party announced the financial situation for January to April. The data showed that the national general public budget revenue was 80.926 trillion yuan, a 2.7% year-on-year decrease; national tax revenue was 66.938 trillion yuan, a 4.9% year-on-year decrease; non-tax revenue was 13.988 trillion yuan, a 9.4% year-on-year increase.
Non-tax revenue includes the realization income of state-owned assets by Communist Party government departments and institutions, and income generated through the exercise of public power, including fines and confiscations.
In addition, from January to April, national government fund budget revenue was 1.3484 trillion yuan, a 7.7% year-on-year decrease. Among them, revenue from the transfer of state-owned land use rights was 1.0536 trillion yuan, a 10.4% year-on-year decrease.
According to Caixin’s report, apart from the general public budget, a considerable part of local government financial resources, especially land transfer revenue, is included in the government fund budget management.
In the cumulative period from January to April, the decline in government fund revenue widened by 3.7 percentage points compared to the first quarter; among them, the revenue from the transfer of state-owned land use rights, which accounts for nearly 80% of government fund revenue, decreased by 10.4%, widening by 3.8 percentage points compared to the first quarter.
Based on Caixin’s calculations, land transfer revenue in April decreased by 21.2% year-on-year, expanding by 2.6 percentage points compared to March, indicating that the real estate market continues to slump, and sales revenue has not yet bottomed out.
First Financial reported that in the first four months of this year, the decline in local land transfer revenue widened compared to the first quarter (-6.7%), reflecting the continued stagnation of the real estate market, insufficient willingness of residents to purchase homes, financial constraints on real estate developers, leading to the reduction of local land transfer revenue.