China home sales saw mild recovery in September amid policy push
CHINA’S home sales moderated their decline in September, following stepped-up efforts from Beijing to support the housing sector.
The value of new home sales among the 100 biggest real estate companies fell 29.2 per cent from a year earlier to 404 billion yuan (S$76 billion), narrowing from a 33.9 per cent decline in August, according to preliminary data from China Real Estate Information Corp (Cric) on Saturday (Sep 30). Sales gained 17.9 per cent on month.
Chinese developers are grappling with a two-year crisis that’s put giants at liquidity risk and deprived the economy of a key growth driver. Authorities recently unveiled fresh reductions in down-payment requirements for homebuyers, promising to also allow lenders to lower rates on existing mortgages.
Home sales recorded a small gain as developers turned more active in launching new projects, Cric said in its report on the data. The recovery may extend to October, it added.
China Index Holdings, another top property agency in China, found September sales were down in number from August, though it also sees reason to expect improvement.
“The policy effect only started to show in some core cities,” said Liu Shui, an analyst at China Index Holdings. “The positive effect is still accumulating.”
Country Garden Holdings, a developer that was once a pillar of the industry, in August posted a record loss and said it may default on its debt. Risk is also spreading to the financial sector, where trust companies with massive exposure to real estate missed payments on some investment products.
Chinese developers are now counting on the Golden Week national holiday to spark a long-awaited revival in home sales. The eight-day holiday period that started on Friday is usually the peak of the industry’s September-October busy season.
Just before the holiday, Shenzhen said it will relax the floor for mortgage rates on first-home purchases, the first of China’s four biggest cities to make such a move. BLOOMBERG
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