China’s property investment, sales drop sharply in April on subdued demand
THE pace of China’s property investment and sales declines more than doubled in April, a development that will undermine confidence in the recovery of the world’s second-biggest economy.
Property investment fell 16.2 per cent year on year last month, according to Reuters calculations based on data from the National Bureau of Statistics (NBS).
This was the fastest clip since November 2022, and follows a 7.2 per cent decline in March.
Property sales measured by floor area slumped 11.8 per cent on-year in April, the most so far in 2023, versus a 3.5 per cent fall in March.
China’s property sector was hit hard in 2022, as a regulatory crackdown on developers’ high debt levels snowballed into a financing crunch. This stalled construction on housing projects, with some buyers even boycotting mortgage repayments.
While there have been recent signs of stabilisation in the sector, with a modest rise in home prices, there is uncertainty over the strength of the momentum.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
And the latest data from China, which also shows industrial output and retail sales growth missing forecasts, does little to allay concerns.
“The sharp decline in property sales in April signals the weak sustainability of this market rebound, with more policies needed to boost the market in the coming months,” said Wang Xiaoqiang, chief analyst with the Zhuge Real Estate Data Research Center.
A private survey showed that China’s average daily home sales by floor area were down 22 per cent during the May Day holiday period in 2023 compared with the same period before the pandemic in 2019.
From January to April, China’s property investment fell 6.2 per cent from a year earlier, versus a 5.8 per cent decline over the January-to-March period.
Property sales by floor area declined 0.4 per cent in the first four months, versus a 1.8 per cent fall in the first three months.
Authorities in Beijing have in recent months rolled out policies to revive the property sector, which accounts for around a quarter of China’s GDP, including urging brokerage sectors to reduce fees for transactions and leasing services.
The Politburo, a top decision-making body, has also vowed to stabilise homebuyers’ confidence and ensure new home deliveries.
New construction starts measured by floor area fell 21.2 per cent in the four months to April from a year earlier, after a 19.2 per cent drop in the first three months.
Funds raised by China’s developers fell 6.4 per cent year on year in the first four months, after a 9.0 per cent slump in the three months to March.
Moody’s on Monday (May 15) changed its outlook on China’s property sector to stable from negative.
“Nationwide sales will stabilise, but recovery will be uneven, while funding conditions will continue to improve with policy support,” the company said.
Share with us your feedback on BT's products and services
