Several key second-tier cities have seen lukewarm interest in land auctions since the middle of the year, research by China’s leading brokerage has revealed, adding to evidence that financial stress on property developers such as China Evergrande Group is growing after regulators intensified restrictions on their financing activities.

Land premiums, the additional price local governments achieve over the reserve price they set before the auction, have collapsed, data compiled by Citic Securities Co. Ltd. (600030.SH) show. The dramatic shift reflects growing reluctance by cash-strapped developers to pay top dollar for land amid a slowdown in sales of new apartments and curbs on their ability to increase their borrowings, notably the “three red lines” policy imposed by the People’s Bank of China and the housing ministry last year.

Local governments in nine cities, including Xiamen, Tianjin and Chengdu, held the second round of residential land auctions for 2021 during the period of June 10 to Sept. 17, Citic Securities said in a report issued Monday. They sold a combined 362 parcels of land at an average price that equates to 6,600 yuan ($1,021) per square meter based on the floorspace of the apartments in their building plans. That’s just 4.85% higher than the combined reserve price, the report said. Nearly 80% of the parcels were sold at the asking price. Six of the cities, which held land auctions in the second half of August or in September, achieved a premium of just 2%.