Left Menu
Development News Edition

UPDATE 1-China's May property sales post biggest drop since Oct 2017

Reuters | Beijing | Updated: 14-06-2019 13:53 IST | Created: 14-06-2019 13:35 IST
UPDATE 1-China's May property sales post biggest drop since Oct 2017
Image Credit: Pixabay

China's property investment growth cooled in May and sales saw their biggest decline since October 2017, suggesting the frothy housing market may not be able to cushion the effects of a slumping manufacturing sector and intensifying trade tensions.

Real estate investment, mainly focused on the residential sector but also including commercial and office space is a major gauge of growth in the world's second-largest economy. China's property market has seen a recent resurgence as some local governments eased home purchase rules to boost economic activity, while Beijing's call for banks to ramp up lending and lower interest rates has also helped boost investor confidence.

But the picture is very uneven, and some analysts caution such a rebound might be difficult to sustain as broader economic growth slows and official property market curbs are expected to remain in place in most cities. A slowdown has been felt deeply in many provincial cities after the real estate market suffered a downturn in late 2018. Price cuts offered by developers have led to protests by angry buyers, making authorities wary of the risk of social unrest.

Property investment in May grew 9.5% from a year earlier, easing from a 12% gain in April and marking its slowest pace since December, according to Reuters calculation based on National Bureau of Statistics (NBS) data. It rose 11.2% on-year for the first five months, compared with a 10.2% increase in the same period last year and 11.9% in January-April.

The slowdown was in line with weaker factory activity and producer price growth in May, adding pressure on Beijing to roll out more stimulus measures to cope with a waning economy and rising trade frictions with the United States. Property sales by floor area - a key indicator of demand - dropped 5.5% in May from a year earlier, compared with a 1.3% rise in April. May's decline was the biggest since October 2017, when sales fell 6 percent, according to Reuters calculations.

For the first five months, sales fell 1.6% following a 0.3% decline in January-April. "The slowdown in the real estate sector is concerning. We really need to keep an eye on its negative impact on growth," economists at ANZ said in a note to clients, trimming its GDP forecasts for China.

Some developers have sought to promote sales by cutting prices, which has also raised alarm. The Chinese city of Enshi tried to stabilise house prices by urging developers to halt drastic price cuts, threatening punishing measures unless such "wrong behaviours" stopped. Funds raised by China's property developers grew 7.6% on-year in January-May, lower than an 8.9% increase in the first four months, official data showed, suggesting their financing pressures may be rising again after looser credit conditions earlier this year helped alleviate some pains for the debt-laden developers.

Foreign investment in China's housing sector rose 38.8% in the first five months, slowing from a 103.7% surge in January-April, as Beijing remained wary of overseas money flowing into the heated market. New construction starts measured by floor area also slowed, rising 4% on-year in May, versus a 15.5% gain in the preceding month, according to Reuters calculations. For January-May, new construction starts rose 10.5% versus a 13.1% increase in January-April.



Why COVID-19 is unstoppable in USA despite it being ranked at the top of GHS Index?

Several worst-hit countries such as Italy, France, Spain, the UK, Canada, and Russia have peaked COVID-19 cases in April. Almost all of them have gradually flattened the curve. However, the USA is setting new daily records of infections tha...

COVID-19 seems cooking biggest ever global scam

The increasing number of corruption cases on COVID-19 funds from throughout the world and involvement of high profile persons indicate that the countries cant ignore corruption in their pandemic response programs. This has generated the nee...

Health Management Information Systems lack holistic, integrated, and pandemic resilient character

Being a part of the United Nations system, the World Health Organization WHO deserves its share of rebuke for its alleged failure issue COVID-19 health emergency alerts on appropriate time. However, the pandemic has also exposed loopholes i...

Pride in the time of coronavirus: a welcome move online?

This year is different in many ways not least as celebrations are also taking place against the dramatic backdrop of a global health crisis and a resurgence in grassroots activism following the death of George Floyd in Minneapolis. ...


Latest News

EXCLUSIVE-TIM excludes Huawei from 5G core equipment tender - sources

Telecom Italia TIM excluded Chinas Huawei Technologies from a tender it launched this month for 5G equipment for the core network it is preparing to build in Italy and Brazil, two sources familiar with the matter said. The list of invited s...

Derailed economic activities getting back on track amid unlocking: Khattar

Haryana Chief Minister Manohar Lal Khattar on Friday said that with the unlocking of the economy, several disrupted activities were getting back on track. Speaking in Rohtak, Khattar said the revenue generation of the state has also increas...

Delhi minister Gautam holds meet over DSGPC polls in March 2021

Delhi minister Rajendra Pal Gautam on Friday held a meeting on the Delhi Sikh Gurdwara Prabandhak Committee Election in March next year and asked the officials to ensure there are no complaints of irregularities and fake voting during the p...

17-year-old apprehended for shooting dead man, 19

A 17-year-old youth was apprehended for allegedly killing a 19-year-old man and injuring another person in Central Delhis Anand Parbat area, police said on Friday. The deceased, identified as Rajan, was a resident of Moti Nagar, while injur...

Give Feedback