China property slump deepens as Beijing mulls over $188 billion of new support
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China’s property sales fell at a faster pace in October and investment in real estate slumped.
PHOTO: AFP
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BEIJING – China’s property sales fell at a faster pace in October and investment in real estate slumped, official data showed on Wednesday, suggesting the crisis-hit sector is yet to emerge from its decline despite Beijing’s recent support efforts.
Property sales by floor area fell 20.33 per cent year on year against a 19.77 per cent fall in September, according to Reuters calculations based on data released by the National Bureau of Statistics.
Sales fell 7.8 per cent year on year in January-October, compared with a 7.5 per cent slide in the first nine months of 2023.
The authorities have been ramping up measures to support real estate, including relaxing home purchase restrictions and lowering borrowing costs, although these have failed to shore up a meaningful recovery in major cities.
Recent economic data has been mixed, with industrial output and retail sales both beating expectations in October, although other indicators such as exports and consumer prices point to persistent drags on growth.
While a twice-a-decade financial policy meeting in October offered few surprises for the property market, the authorities remain concerned about risks that could spill into other industries, threatening financial stability.
China plans to provide at least one trillion yuan (S$188 billion) of low-cost financing
The People’s Bank of China (PBOC) would inject funds in phases through policy banks, with the money ultimately trickling down to households for home purchases, the people said, adding that the government may take the first step as soon as November.
The plan, part of a new initiative by Vice-Premier He Lifeng, would mark a major step-up in the authorities’ efforts to put a floor under the biggest property downturn in decades, which has weighed on economic growth and consumer confidence.
Reuters previously reported a state-engineered rescue of Country Garden by Ping An Insurance Group, which would be one of the most significant interventions to date by China to support the sector, though Ping An has repeatedly denied the rescue plan.
Property investment fell 16.7 per cent from a year earlier after an 18.7 per cent slide in September, according to Reuters calculations.
New construction starts measured by floor area fell 23.2 per cent year on year, after a 23.4 per cent slump in the first nine months.
Funds raised by China’s property developers were down 13.8 per cent, after a 13.5 per cent fall in January-September. REUTERS, BLOOMBERG
