China’s new-home sales steady on continued policy support

CHINA’S residential sales grew slightly in February, in a sign that the real estate market is stabilising with continued policy support.  

The value of new-home sales from the 100 biggest property companies rose 1.2 per cent to 188 billion yuan (S$34.8 billion) from a year earlier, according to preliminary data from the China Real Estate Information Corp. That’s after a 3.2 per cent decline in January. 

China is trying to put a floor under the real estate meltdown that’s weighed on its economy for more than three years. A solid rebound in transactions is a prerequisite to stabilising prices, according to Fitch Ratings. 

Investors are now awaiting next week’s National People’s Congress, an annual legislative meeting where policymakers typically set key economic goals including growth targets and budget deficits. The government’s work report due on its first day may signal more policy fine-tuning to support genuine demand for housing, Bloomberg Economics analysts Shu Chang and David Qu wrote in a note. 

China will likely continue to signal a commitment to ensuring that developers complete and deliver pre-sold houses, the analysts also wrote. Loans to support home construction for the so-called “White List” projects reached 5.6 trillion yuan as of Jan 22. BLOOMBERG