China home sales slump drags on despite latest rescue

CHINA’S residential slump deepened again in July despite the country’s most forceful efforts yet to support the property market. 

The value of new-home sales from the 100 biggest real estate companies slumped 19.7 per cent from a year earlier to 279.07 billion yuan (S$51.6 billion), faster than the 17 per cent decline in June, according to preliminary data from China Real Estate Information. Transactions dropped 36.4 per cent from June, after showing a notable increase in April and May. 

The accelerating slide underscores how China’s recent rescue package is falling short of expectations. Bloomberg Economics estimates that the central bank’s US$42 billion relending programme can only help local governments purchase 0.8 per cent of China’s 60 billion unsold homes. Buyer sentiment has also been hurt since a twice-a-decade meeting of the ruling Communist Party failed to roll out further forceful support measures. 

The real estate sector continues to drag down China’s economic growth, which is expected to undershoot the government’s official 5 per cent target this year, according to Bloomberg Economics estimates. BLOOMBERG