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China Land Sales Down for Fifth Month Amid Debt Clampdown

In November the value of land sales nationwide sank 9.9% from a year earlier, although that was less than the 13% annual decline in October, based on finance ministry data


China developers
Debris near towers built for China Fortune Land Development, in Zhuozhou, Hebei province. Regulators have encouraged banks to extend loans to Chinese developers for projects, and districts - including in Henan province, where protests began, and the city of Chongqing - have set up task forces. File photo: Reuters.

 

The Chinese government’s revenue from land sales fell for a fifth straight month in November as a liquidity crunch engulfed the country’s most indebted developers amid persistent market headwinds.

In November, the value of land sales nationwide sank 9.9% from a year earlier, although that was less than the 13.14% annual decline in October, according to calculations based on finance ministry data.

Beijing’s efforts to reduce leverage across the sector, including limits on how much developers can borrow, have resulted in a financial crunch among real estate firms, including China Evergrande Group, this year.

The appetite of cash-strapped private developers has been lacklustre at urban land auctions as a result, pressuring local governments to scramble for other income to fund investment and support the economy.

In the second round of land auctions this year at 22 major cities that ended in November, private developers spent at least 140.6 billion yuan ($23 billion) on land, down from 553.1 billion yuan in the first round in March-June, according to a Reuters analysis of public notices on the sales.

Official data on Wednesday showed China’s property suffered more headwinds in November, with home prices, sales, investment and construction mired in negative territory, weighed by weak demand and the cash crunch among developers.

 

  • Reuters with additional editing by Jim Pollard

 

ALSO SEE:

 

Fall In China’s $1.3tn Land Sales to Test Regional Finances

China Developers Facing Worst Debt Crisis In A Decade

 

Evergrande debt crisis explained

 

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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