After a short-lived rebound, China’s new home sales have resumed their downward spiral, dropping in March in a fresh reminder that the years-long property crisis continues to drag on and more policy support is needed to turn things around.
New home transactions at China’s 100 largest property developers dropped 11.4% to 317.57 billion yuan from a year earlier, or about $43.76 billion, according to data released by China Real Estate Information Corp. That follows a 1.2% rise in February.
In another sign of the financial stress Chinese developers are under, Shenzhen-based China Vanke swung to a net loss in 2024 as sales declined. That marks the property group’s first annual loss since its 1991 initial public offering.
The reminders of the persistence of property-sector woes that have been long been a drag on China’s economy come as a new slate of U.S. tariffs is set to be announced that could ramp up pressure on policymakers to do damage control.
“The huge boost that exports have delivered to the economy over recent years will dissipate in 2025 and could go into reverse,” said economists at Capital Economics, especially as the property downturn and wider deflationary pressures continue to haunt the economy.
Beijing has repeatedly vowed to stabilize the property market, but policymakers have yet to announced drastic measures like a direct state takeover of unfinished apartments that some economists believe are essential to rescuing the sector.
In addition to high levels of unsold real-estate inventory, China’s residential property market also faces structural challenges, including demographic shifts and low housing affordability, analysts at Fitch Ratings said in a recent note.
While the property easing measures introduced late last year have helped warm up housing markets in first-tier cities like Beijing and Shanghai, the Fitch analysts say the recovery remains uncertain, noting that secondary-home prices improved late last year but declined again in February 2025.
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(END) Dow Jones Newswires
April 01, 2025 04:56 ET (08:56 GMT)
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