China’s September home sales steady in sign of stabilisation
Weakness in new-home prices in the second quarter has stoked growing concerns about deflation
[BEIJING] China’s residential home sales steadied in September in a sign of potential stabilisation nearly three years after it started to issue support policies for the sector.
The value of new-home sales from the 100 largest property companies grew 0.4 per cent year on year to 252.8 billion yuan (S$45.3 billion), the latest preliminary data from China Real Estate Information on Tuesday (Sep 30) showed. That marked a substantial improvement compared to the 17.6 per cent decline in August, according to Bloomberg calculations.
While China has refrained from deploying large-scale monetary stimulus, it has introduced a flurry of incremental policies since late 2022 in an effort to end the housing slump. Weakness in new-home prices in the second quarter has stoked growing concerns about deflation.
China’s property slump is drawing heightened attention as the economy shows fresh signs of weakness. Falling home prices and a slowdown in new housing investment have shaken household and business confidence, adding to deflationary pressures.
Calls for further policy support for the residential market have grown as the effects of a stimulus blitz last September wear off. A group of academics led by an adviser to the country’s central bank last week urged Beijing to stabilise important traditional sectors including real estate, including using fiscal support, echoing calls of other prominent economists.
China’s capital city of Beijing and financial hub of Shanghai both eased home rules in August, but analysts call them “incremental positives” only.
Even if China’s housing market picks up in the near term, the outlook remains grim. Demand for new homes in cities is expected to stay at 75 per cent below its 2017 peak in the coming years, due in part to a shrinking population, Goldman Sachs estimated. BLOOMBERG
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