BEIJING: A slide in China’s property investment and sales more than doubled in pace in April, a sharp decline in a sector crucial to the health of the world’s second-biggest economy that will undermine confidence in its recovery.
Property investment fell 16.2% year-on-year last month, the fastest clip since November 2022, according to Reuters calculations based on data from the National Bureau of Statistics (NBS).
It fell 7.2% in March. Property sales measured by floor area slumped 11.8% on year in April, the most this year, versus a 3.5% fall in March.
China’s property sector was hit hard in 2022 as a regulatory crackdown on developers’ high debt levels snowballed into a financing crunch, stalling construction on housing projects with some buyers even boycotting mortgage repayments.
While the sector has recently seen signs of stabilisation with a modest rise in home prices, there is uncertainty on the strength of the momentum.
And the latest data from China, which also shows industrial output and retail sales growth missing forecasts, does little to allay concerns.
“The sharp decline in property sales in April signals the weak sustainability of this market rebound, with more policies needed to boost the market in the coming months,” said Wang Xiaoqiang, chief analyst with the Zhuge Real Estate Data Research Center.
A private survey showed China’s average daily home sales by floor area were down 22% during the May Day holiday period in 2023, versus the same period before the pandemic in 2019.
China new home prices up slightly in April, less cities post gains
For January-April, China’s property investment fell 6.2% from a year earlier versus a 5.8% decline over January-March.
Property sales by floor area declined 0.4% in the first four months, versus a 1.8% fall in the first three months.
Authorities in Beijing have in recent months rolled out policies to revive the property sector, which accounts for around a quarter of China’s GDP, including urging brokerage sectors to reduce fees for transactions and leasing services.
The Politburo, a top decision-making body, has also vowed to stabilise homebuyers’ confidence and ensure new home deliveries.
New construction starts measured by floor area fell 21.2% in January-April from a year earlier, after a 19.2% drop in the first three months.
Funds raised by China’s developers fell 6.4% year-on-year in the first four months, after a 9.0% slump in January-March. Moody’s on Monday changed the outlook on China’s property sector to stable from negative.
“Nationwide sales will stabilize, but recovery will be uneven, while funding conditions will continue to improve with policy support,” Moody’s had said.
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