Land Sales Seen Turning the Corner

Land sales are the one major bullish point on the Chinese economy and the Deutsche analyst who warned about land sales last year sees the effect ending.

FTAlphaville: China jumps off its own fiscal slide
We believe the fiscal slide is now coming to its end, because the recovery of land sales seems to have firmed up and gathered momentum in recent months.

While growth of land sales had hit the bottom in 2014Q4, the recovery did not show much momentum until May/June 2015. For instance, the yoy growth in value terms was still at -36% in April, but it turned positive in July to 3% (Figure 5). The preliminary data of September now shows a yoy growth of 30%, which could be even higher due to the lag in land sales reporting.
Of course a 30% rebound following a 50% drop is still a significant decline in revenues. If land sales are not entering a new bull phase, but have spiked due to monetary easing, it is a positive sign, but not a sustainable one without incurring costs such as a major depreciation of the yuan.

Lots of details at the link.

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