Goldman Sachs warns China’s housing overhaul will slash land sale revenues by 30%

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. In 2025, presales accounted for approximately 68% of all new-home transactions. The new regulations effectively dismantle the dominant sales model in one of the world’s largest real estate markets. Goldman’s economists ...