China home sales rise for first time in 20 months on policy aid

CHINA’S home sales rose for the first time in 20 months, signalling demand is recovering after policymakers expanded support for the struggling sector. The value of new home sales by the 100 biggest real estate developers climbed 14.9 per cent in February from a year earlier to 461.6 billion yuan (S$89.9 billion), according to preliminary data from China Real Estate Information. That’s the first year-on-year increase since June 2021. The figures were helped by a favourable comparison with February 2022, which included the Chinese New Year holiday. It was celebrated in January this year. February’s “mild” sales recovery for China property is “an optimal scenario to drive ongoing policy support without reversal”, Citigroup property analysts led by Griffin Chan wrote in a note on Wednesday (Mar 1). “Given continuous sell-through recovery in recent three months, we expect sentiment will sustain.” A Bloomberg index tracking 33 major Chinese builders, mostly listed in Hong Kong, gained 2 per cent in morning trading, the biggest jump in more than a week. China has shifted policy to help the industry — first by easing financing for developers and then by taking steps to revive homebuyer demand. Some local governments moved away from rules restricting land sales, while the securities watchdog introduced a pilot programme for real estate private equity investment funds. Wuhan — one of China’s biggest cities — eased a key restriction on housing purchases in February, allowing local families to buy an additional home in areas with purchasing caps. “Initial signs have emerged that the home market may be rising again,” Yang Kewei, chief analyst at China Real Estate Information, wrote in a note after the data release, while cautioning that the year-to-date climb is partly due to a low base. “Whether the recovery can sustain in March depends on homebuyers’ purchasing power.” BLOOMBERG

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