The Chinese real estate market collapsed in July with all indices falling. An expert predicts that the real estate plunge, together with the economic slowdown, will lead to a financial shortage of 6 trillion yuan (about $889.6 billion) for local governments for the year, as the local governments’ revenues from land sales may be halved this year.
Lu Ting, Nomura Securities’ Chief China Economist, penned an article on China’s top financial news outlet Caixin on July 24, pointing out that although China’s real estate sales improved in June, data in July showed that sales had once again declined. Even in June, home starts plummeted by 45 percent year-on-year, home completions fell 41 percent, land sales fell 53 percent by area and 65 percent by value.
