Goldman expects the downturn in land sales receipts to last until 2027 or even beyond
Published Mon, Sep 7, 2026 · 11:04 AM
CHINA’S recent overhaul of the way homes are sold will exacerbate already stretched local government finances, fuelling a 30 per cent drop in land sale revenues, Goldman Sachs Group economists said.
That estimate exceeds the bank’s earlier forecast of a 20 per cent decline, according to a Monday (Sep 7) note by economist Wang Lisheng. He pointed to China’s recent move to shift developers away from a popular presale model and toward offering completed properties, something that could make it harder for cash-strapped developers to buy land.
Goldman’s new estimate is in line with the latest figures: In the first seven months of 2026, land sales revenue by local governments nationwide dropped 30.8 per cent to 1.2 trillion yuan (US$179 billion), Ministry of Finance data showed.
The estimate underscores how much pressure China’s local governments are under as they grapple with a real estate slump that has sapped a key source of revenues. Goldman expects the downturn in land sales receipts to last until 2027 or even beyond, with revenues from these sales ultimately falling as much as 90 per cent from a peak in the middle of 2021, the bank said.
China’s economy showed widespread weakness in July, with consumption softening more than expected and new-home prices continuing to fall. Some economists estimate that growth slipped further below the government’s annual target, sparking a call from Premier Li Qiang to ramp up supportive measures.
China’s presales system, which allows developers to sell residences before completion, has been widely blamed for fuelling excess supply in the sector and contributing to a debt pile-up by developers. Unfinished home construction projects sparked widespread mortgage boycotts and dissent in the country a few years ago.
SEE ALSO
Under the new model, developers will only collect a small deposit from homebuyers. If they fail to deliver homes on schedule, buyers have right to walk away from the purchase. BLOOMBERG