What’s new: China’s home sales declined again in October as the slowing economy and ongoing Covid-19 outbreaks dampened homebuying demand.
In the 10 months from January through October, national home sales dropped 25.6% in terms of square meters and 28.2% in terms of value, the National Bureau of Statistics said Tuesday. The sales area declined by 23.2% year-on-year and sales value dropped by 23.7% in October.
Property sales in northeastern and western China declined the most, while the decrease in eastern and central China regions was more modest.
With weak sales and tight liquidity, developers are reluctant to start new construction. In October, China's real estate development investment plunged 16% year-on-year to 1.04 trillion yuan ($147 million), the lowest monthly value of the year. Total investment in the first 10 months dropped 8.8% year-on-year to 11.39 trillion yuan.
The housing market is showing no signs of life in November. In the first two weeks this month, home sales in 50 major cities declined more than 10% year-on-year, and a wait-and-see sentiment prevails among homebuyers, according to a survey by real estate research firm China Index Academy.
The background: The slump in real estate has dragged on for more than a year, and there’s been little sign of a sustained recovery in sales or construction, with developers unable to get the cash they need to finance operations.
Central and local authorities rolled out a series of policies to shore up the industry, including easing mortgage costs and providing backing for developers to issue bonds.
Two of China’s top regulators issued a notice Friday encouraging financial institutions to provide more support for the real estate sector and calling on them to help developers extend or swap their debts.
China gave embattled developers a boost Monday by allowing them access to more money held in presale accounts, the biggest source of funds for cash-strapped builders.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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