The decline of China’s home sales slowed in October, following stepped-up efforts from Beijing to support the housing sector.
The value of new home sales among the 100 biggest real estate companies fell 27.5% from a year earlier to 406.7 billion yuan ($55.6 billion), narrowing from a 29.2% decline in September, according to preliminary data from China Real Estate Information Corp. on Tuesday. Sales gained 0.6% on month.
China’s years-long real estate slump has starved developers of cash, delayed completion of apartments and deprived the economy of a key driver. While the latest economic data put the government’s growth goal of about 5% well within reach this year, that could drop to 2.9% in 2024 if the property crisis deepens, S&P Global Ratings warned last week.
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Authorities have attempted to halt the slide in recent months by unveiling fresh reductions in down-payment requirements while also encouraging lenders to lower rates on existing mortgages. Despite that, home prices in September fell at the fastest pace in almost a year, a blow to sentiment in a country where property has long been one of the main stores of wealth.
“The subdued home prices have kept homebuyers at bay,” said Chen Wenjing, associate research director at China Index Holdings. “The current supportive measures have had some effect in some of the biggest cities, but the policy effect doesn’t look stable.”
Sweeping rescue policies in November of last year drove a recovery between February and May, which tided off after pent-up demand was released.
The real estate crisis marked another grim milestone on Monday, when China Evergrande Group, the world’s most indebted developer, got “the last adjournment” in a liquidation hearing against it. The Dec. 4 push back is the latest in a series of delays since winding-up proceedings began last year.
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Challenges for Evergrande have mounted on multiple fronts. Founder Hui Ka Yan has been suspected of committing crimes and placed under police control, the company said in late September.
Its peer Country Garden Holdings Co. was deemed in default on a dollar bond for the first time on Oct. 25, underscoring its fall into distress amid a broader property debt crisis that’s shaken the world’s second-biggest economy.
--With assistance from Evelyn Yu.
