Friday, August 19, 2022
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China’s property market woes worsened in November

China property

The property sector has slowed sharply in recent months, with sentiment shaken by tight regulations and a growing liquidity crisis

China’s property market woes worsened in November, with prices for both new and resale homes dropping amid weaker demand in bigger cities, a private-sector survey showed on Wednesday.

The property sector, accounting for a quarter of the country’s gross domestic product (GDP), has slowed sharply in recent months, with sentiment shaken by tight regulations and a growing liquidity crisis that has engulfed some of the country’s most indebted developers.

New home prices in 100 cities dipped 0.04% in November from a month earlier, compared with 0.09% growth in October, according to data from China Index Academy, one of the country’s largest independent real estate research firms.

That was the first decline in the survey since 2015, except for a drop of 0.24% in February 2020, the height of the COVID-19 pandemic in China.

Only 30% of 100 cities reported monthly price rises for new homes.

Prices in the resale home market dropped 0.08% month-on-month, deepening from a 0.04% decline in October.

Official data for October had shown a price drop for that month for new homes, the first decline since March 2015, and falling resale prices in most cities, along with a plunge in construction starts.

The downward trend in the property market remains unchanged in the near future, said the academy’s research director Cao Jingjing.

Rapidly deteriorating conditions in the property sector have prompted speculation that policymakers may start to dial back tough restrictions on buyers and developers and even cut interest rates.

But policymakers are widely expected to stand firm for now, while making some financial tweaks to help genuine home buyers.

Some banks have accelerated the disbursement of approved mortgages and some were told to issue more loans to property firms for project development.

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