Sales of residential real estate in China stabilized in September, indicating a potential stabilization almost three years after the country began implementing policies to support the sector, UNN reports with reference to Bloomberg.
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The value of new home sales from the 100 largest real estate companies rose 0.4% year-on-year to 252.8 billion yuan ($35.5 billion), according to the latest preliminary data from China Real Estate Information Corp. on Tuesday. This represents a significant improvement compared to a 17.6% decline in August, according to Bloomberg calculations.
While China has refrained from large-scale monetary stimulus, it has introduced a series of incremental measures since late 2022 to end the housing market downturn. The fall in new home prices in the second quarter raised growing concerns about deflation.
The downturn in China's real estate market is attracting increased attention as the economy shows new signs of weakness. Falling home prices and slowing investment in new housing have shaken household and business confidence, exacerbating deflationary pressures.
Calls for further policy support for the housing market have intensified as the effects of last September's blitz stimulus fade. Last week, a group of academics led by the country's central bank adviser called on Beijing to stabilize important traditional sectors, including real estate, particularly through fiscal support, echoing calls from other prominent economists.
China's capital Beijing and financial hub Shanghai eased housing settlement rules in August, but analysts call this only "incremental positives."
Even if China's housing market recovers in the near future, the outlook remains bleak. Demand for new urban housing is expected to remain 75% below its 2017 peak in the coming years, partly due to population decline, Goldman Sachs Group Inc. estimated.
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