China home sales slump persists after Evergrande liquidation

THE sharp slowdown in China’s home sales dragged on in January, even as policymakers stepped up efforts to arrest the property slump. 

The value of new home sales from the 100 biggest real estate companies slid 34.2 per cent from a year earlier to US$33 billion, following a 34.6 per cent decline in December, according to preliminary data from China Real Estate Information Corp. January’s sales were down 47.9 per cent from the previous month, a record low in recent years. 

The property downturn has been a major headwind for China’s economy, ratcheting up pressure on developers struggling to repay debts and complete projects. China Evergrande Group received a liquidation order from a Hong Kong court Monday, marking the largest collapse in the three-year real estate crisis. 

Regulators have added more measures since last week to bolster the country’s property and stock markets. One key step was broadening the use of commercial real estate loans for developers to help them repay other debt. 

Authorities also recently called on local governments to back developers’ financing needs, including drafting a list of projects eligible for funding. Some financial firms are responding, with Ping An Bank putting 41 developers on a list of builders eligible for its funding support, Bloomberg News reported.

Other recent steps include relaxing home buying curbs in Beijing and Shanghai, two of the country’s biggest housing markets. BLOOMBERG