China’s property sales extend declines, weighing on outlook

A man rides a scooter past apartment highrises that are under construction near the new stadium in Zhengzhou, Henan province, China, Jan 19, 2019.  REUTERS/Thomas Peter/File photo

BEIJING  – China’s property sales fell at a faster pace in October and investment in real estate slumped, official data showed on Wednesday, suggesting the crisis-hit sector is yet to emerge from its decline despite Beijing’s recent support efforts.

Property sales by floor area fell 20.33 percent year-on-year against a 19.77 percent fall in September, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS).

Sales fell 7.8 percent year-on-year in January-October, compared with a 7.5- percent slide in the first nine months of 2023.

Authorities have been ramping up measures to support real estate, including relaxing home purchase restrictions and lowering borrowing costs, although these have failed to shore up a meaningful recovery in major cities.

Recent economic data has been mixed with industrial output and retail sales both beating expectations in October although other indicators such as exports and consumer prices point to persistent drags on growth.

While a twice-a-decade financial policy meeting last month offered few surprises for the property market, authorities remain concerned about risks that could spill into other industries, threatening financial stability.

China plans to provide at least 1 trillion yuan ($137 billion) of low-cost financing to the urban village renovations and affordable housing programs, Bloomberg News reported on Tuesday, citing people familiar with the matter.

Reuters previously reported a state-engineered rescue of Country Garden by Ping An Insurance Group, which would be one of the most significant interventions to date by China to support the sector, though Ping An has repeatedly denied the rescue plan.

Property investment fell 16.7 percent from a year earlier after an 18.7 percent slide in September, according to Reuters calculations.

New construction starts measured by floor area fell 23.2 percent year-on-year, after a 23.4 percent slump in the first nine months.

Funds raised by China’s property developers were down 13.8 percent year-on-year after a 13.5 percent fall in January-September.