What’s new: China’s property industry showed no sign of rebounding as key business indicators including investment and sales slid again in July.
Investment in property development totaled 6.77 trillion yuan ($933 billion) from January to July, down 8.5% from the same period a year ago, data released Tuesday by the National Bureau of Statistics (NBS) showed. The decline widened from a 7.9% drop in the first six months.
Property investment in July dropped 28.7% from the previous month to 916.7 billion yuan, representing the lowest monthly investment this year, NBS data showed. The total area of new housing construction fell 24.5% year-on-year during the January-to-July period.
Property sales by floor area slid 6.5% year-on-year during the first seven months, compared with a 5.3% decline in the first six months, official data showed. Sales in July plunged 46.1% from the previous month, the lowest monthly reading since January.
The context: China’s real estate sector has been shrinking for more than two years, stifling the recovery of the world’s second-largest economy, despite a series of measures rolled out by the government to shore up the market.
Li Yujia, chief property policy researcher at the Guangdong Urban and Rural Planning and Design Institute, said the weaker performance in July partly reflected seasonal factors as the property market is traditionally slow in July and August. But it also indicated waning market sentiment following a spreading crisis among major developers.
Last week, Country Garden Holdings Co. Ltd., formerly China’s largest developer by sales, missed two dollar bond interest payments totaling $22.5 million, sparking concerns over a potential default that could be as severe as that of China Evergrande Group.
China’s property investment started falling in April 2022, and the magnitude of the decline expanded month by month. For all of 2022, China’s property development investment contracted by 10% from the previous year.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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