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April property investment down 16.2% y/y vs 7.2% drop in
March
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April property sales down 11.8% y/y vs 3.5% drop in March
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Sharp sales drop signals weak sustainability of rebound
-analyst
(Recasts, adds analyst's comments)
BEIJING, May 16 (Reuters) - A slide in China's property
investment and sales more than doubled in pace in April, a sharp
decline in a sector crucial to the health of the world's
second-biggest economy that will undermine confidence in its
recovery.
Property investment fell 16.2% year-on-year last month, the
fastest clip since November 2022, according to Reuters
calculations based on data from the National Bureau of
Statistics (NBS). It fell 7.2% in March.
Property sales measured by floor area slumped 11.8% on year
in April, the most this year, versus a 3.5% fall in March.
China's property sector was hit hard in 2022 as a regulatory
crackdown on developers' high debt levels snowballed into a
financing crunch, stalling construction on housing projects with
some buyers even boycotting mortgage repayments.
While the sector has recently seen signs of stabilisation
with a modest rise in home prices, there is uncertainty on the
strength of the momentum. And the latest data from China, which
also shows industrial output and retail sales growth missing
forecasts, does little to allay concerns.
"The sharp decline in property sales in April signals the weak sustainability of this market rebound, with more policies needed to boost the market in the coming months," said Wang Xiaoqiang, chief analyst with the Zhuge Real Estate Data Research Center. A private survey showed China's average daily home sales by floor area were down 22% during the May Day holiday period in 2023, versus the same period before the pandemic in 2019. For January-April, China's property investment fell 6.2% from a year earlier versus a 5.8% decline over January-March. Property sales by floor area declined 0.4% in the first four months, versus a 1.8% fall in the first three months. Authorities in Beijing have in recent months rolled out policies to revive the property sector, which accounts for around a quarter of China's GDP, including urging brokerage sectors to reduce fees for transactions and leasing services.
The Politburo, a top decision-making body, has also vowed to stabilise homebuyers' confidence and ensure new home deliveries. New construction starts measured by floor area fell 21.2% in January-April from a year earlier, after a 19.2% drop in the first three months.
Funds raised by China's developers fell 6.4% year-on-year in the first four months, after a 9.0% slump in January-March. Moody's on Monday changed the outlook on China's property sector to stable from negative. "Nationwide sales will stabilize, but recovery will be uneven, while funding conditions will continue to improve with policy support," Moody's had said. (Reporting by Liangping Gao, Ella Cao and Ryan Woo; Editing by Himani Sarkar)
