Deteriorating conditions in China’s residential property sector since mid-2021 has seen new construction activity and land sales decline in year-on-year terms. While the former points to weaker near-term economic growth prospects, the latter is a major concern for local government revenues as many of these authorities are highly dependent on revenue from land sales. The composition of buyers also points to concerns around the longer-term sustainability of local government balance sheets.

For further details, please see the China Economic Update (October 2022)