China April property sales plunge 46.6%, fastest since at least 2010

CHINA’S April property sales by value fell at their fastest pace in at least 12 years as Covid-19 lockdowns further cooled demand despite more policy easing steps aimed at reviving a key sector of the world’s second-largest economy.

In April, property sales by value slumped 46.6 per cent from a year earlier, the fastest pace since at least 2010, and sharply widening from the 26.17 per cent fall in March, according to Reuters calculations based on data from the National Bureau of Statistics (NBS) released on Monday (May 16).

In January-April, property sales by value fell 29.5 per cent year on year, compared with the 22.7 per cent decline in the first 3 months.

China’s property sector, a major economic growth driver, has been in a severe slump since last year after authorities clamped down on debt-laden developers, spooking many would-be home buyers who feared projects would not be completed.

More than 80 cities have taken steps to boost demand since the beginning of the year, including subsidies, reductions in mortgage rates and smaller down payments.

However, the property outlook has remained bleak amid protracted Covid-19 curbs in dozens of cities, including Shanghai, currently in its seventh week of lockdown.

Chinese financial authorities on Sunday allowed a further cut in mortgage loan interest rates for first-time home buyers to spur demand.

“Although we expect this cut to provide a benefit, the positive impact could be quite limited, as stringent anti-Covid measures appear set to continue for an unspecified time,” Nomura said in a note on Monday.

Nationwide property investment by developers fell 2.7 per cent from a year earlier in January-April, after a 0.7 per cent gain in the first 3 months of the year.

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In April, property investment fell 10.1 per cent year on year, the fastest pace since December, compared with the 2.4 per cent decline in March.

New construction starts measured by floor area plunged 44.19 per cent from a year earlier, the fastest pace since January-February 2020.

New construction starts fell 26.3 per cent in January-April from a year earlier, after a 17.5 per cent decline in the first quarter of the year.

Japanese construction equipment maker Komatsu reported a 16.6 per cent fall in the use of its machines in China in April, extending a 17.3 per cent decline in March. REUTERS