China home sales slump eases as stimulus boosts buyer morale
CHINA’S residential property sales rose in October, the first on-year increase of 2024, as the government’s latest stimulus blitz brought back buyers.
The value of new-home sales from the 100 biggest real estate companies rose 7.1 per cent from a year earlier to 435.5 billion yuan (S$80.9 billion), reversing from a 37.7 per cent slump in September, according to preliminary data from China Real Estate Information Corp. Sales surged 73 per cent from a month earlier.
The improvement came after China unleashed its strongest package of measures, including cutting borrowing costs on existing mortgages, relaxing buying curbs in big cities and easing downpayment requirements. Home sales jumped during the week-long National Day celebrations, with developers handing out more promotions.
The residential market “turned more active in October as homebuyers regained some confidence,” said Chen Wenjing, a research director at China Index Holdings. “However, more efforts are needed to help the sector stem its decline.”
Analysts are expecting more policy support to ensure China’s roughly 5 per cent economic growth target this year. President Xi Jinping reiterated the need to hit that goal in the lead up to a key legislative meeting next week.
International Monetary Fund director Kristalina Georgieva has warned that China’s annual growth could drop to “way below” 4 per cent in the future without reforms to lift domestic consumption. A yearslong property crash has wiped out billions of US dollars in household wealth, adding to deflationary pressures.
SEE ALSO
In late September, the trading hub of Guangzhou became the first tier-1 city to remove all restrictions buying residential property. The other top-tier cities Beijing, Shanghai and Shenzhen allowed more people to purchase residences in suburban areas, while letting some others to buy more homes.
The People’s Bank of China also greenlit the refinancing of as much as US$5.3 trillion of existing mortgages for millions of families.
Cash-strapped developers are counting on a sales revival to persuade debt holders. China Vanke suffered another hefty loss in the third quarter, with its contract sales down 35 per cent in the first nine months from the same period a year earlier. Country Garden Holdings also won bondholder approval to extend onshore bond payments after failing to secure enough cash. BLOOMBERG
Share with us your feedback on BT's products and services