China's Feb home sales plunge as Covid-19 outbreak deepened

Shanghai

KEY homebuilders in China saw sales slump last month as the novel coronavirus outbreak deepened.

Contracted sales plunged 33 per cent on average compared to February 2019 across 30 developers tracked by Bloomberg. The contraction was the steepest in at least six years and came despite property firms' best efforts to migrate sales online.

Among the worst hit were China Jinmao Holdings Group (down 69 per cent), Greentown China Holdings (down 67 per cent) and China Aoyuan Property Group (down 65 per cent).

The only company that bucked the trend was China Evergrande Group. Its February sales jumped 108 per cent, which suggests that its aggressive marketing campaign paid off handsomely. The Shenzhen-based developer was offering discounts of up to 25 per cent on many of its projects, get-out clauses for buyers and price-match promises.

A lacklustre February was inevitable as over 100 cities went into lockdown to prevent the new coronavirus from spreading. Developers closed showrooms and as of the start of this month, many on-site sales rooms remained out of action.

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February home-price data for 70 major cities across China is due Monday. Home prices rose at the slowest pace in almost two years in January, and analysts are watching closely to see whether the gauge will show a decline in home values.

There are also concerns about how fast residential apartment sales can pick up in the coming months. China is starting to get back to work but many factories are not at full capacity due to clogged logistics systems, a lack of staff or limited supplies and raw materials.

Government controls and a fear of going outside have curtailed consumer spending and dented confidence. Construction delays due to the lack of migrant workers may also slow sales. BLOOMBERG