China’s decision to force developers to sell completed homes instead of units still under construction is about to make an already brutal property downturn significantly worse. Goldman Sachs economists are projecting a 30% drop in land sale revenues as the new regulations choke off a funding mechanism that has kept the sector, and by extension local governments, afloat for decades.
Presales and related mortgage disbursements historically covered roughly 40% of developers’ construction capital. Take that away, and the industry’s ability to buy land and build new projects shrinks by a comparable margin.
A market already in freefall
The new rules, introduced around August 29-31, didn’t arrive in a vacuum. China’s property sector has been sliding since 2021, and the numbers from 2026 show no sign of a floor forming.
Land sales revenue dropped 30.8% year-on-year in the first seven months of 2026. Nationwide property development investment fell 19.2% over the same period.
