Goldman Sachs economists now estimate that China’s overhaul of how homes are sold will cut local governments’ land-sale revenue by roughly 30% — up from the bank’s earlier forecast of a 20% decline. The revised estimate, from a Monday note by economist Wang Lisheng, points to a specific mechanism: China’s shift of developers away from the presale model — selling homes before they’re built — toward requiring completed properties before a sale closes.
Under the new rules, developers collect only a small deposit from homebuyers up front; if a developer fails to deliver on schedule, the buyer has the right to walk away from the purchase. That protects buyers, but it also cuts off a cash source developers have relied on to fund land purchases — which is why Goldman ties the new rules directly to a shrinking land-sales market, and by extension to local government budgets, since land sales are one of their core revenue streams.
Goldman’s estimate lines up with data already on the books: land-sale revenue collected by local governments nationwide fell 30.8% year-on-year to 1.2 trillion yuan (US$179 billion) in the first seven months of 2026, according to Ministry of Finance figures. Goldman expects the downturn to continue “until 2027 or even beyond,” with land-sale revenue ultimately falling as much as 90% from its peak in mid-2021.
This is a follow-on to the broader home-sales policy package Beijing rolled out over the weekend of August 28–31, which Zagdim covered on September 1 (“China’s Weekend Property Overhaul Was Sold as Relief. The Market Priced It as Triage.”). Today’s note is the first sell-side estimate to attach a specific number to that package’s fiscal impact on local governments — and Goldman’s own revision, from 20% to 30%, signals the bank sees the hit deepening as the rules take effect.
References
Bloomberg – China Property Moves to Fuel 30% Hit to Land Sales, Goldman Says / The Business Times – China’s new home-presale rules could cut land sales by 30%: Goldman / Crypto Briefing – Goldman Sachs warns China’s housing overhaul will slash land sale revenues by 30%
