China home sales slump deepens as falling prices deter buyers
The value of new-home sales by the 100 largest property companies dropped 24 per cent from a year earlier to 211.2 billion yuan (S$38 billion), according to preliminary data from China Real Estate Information Corp. Sales plunged 38 per cent from 339 billion yuan in June, Bloomberg calculations show.
China's residential slump has dragged on for more than four years, with prices of new homes sliding the most in eight months in June. The worsening decline signals the effects of a stimulus blitz last September are wearing off, and adds to concerns of deflation in Asia's largest economy.
'The property sector is still in deep trouble,' Lu Ting, chief China economist at Nomura Holdings, wrote in a recent note.
Calls for further policy support for the residential market have grown louder as the slump drags on. The Communist Party's decision-making Politburo refrained from property stimulus measures at a meeting this week after the Chinese economy held up surprisingly well in the face of US tariffs.
At the meeting, China vowed to continue 'carrying out urban renewal projects in a high-quality manner,' echoing directives from a high-level work conference on urban planning earlier in the month.
The July Politburo meeting usually discusses policymaking for the remainder of 2025. But it didn't repeat a vow to 'stop the decline' in the property market, which has become a key phrase used since the 24-member group made the pledge last September.
The lack of a pledge for the housing sector signals there is 'no urgency for property easing,' Larry Hu, chief China economist at Macquarie Group, wrote in a Wednesday note.
Even if China's housing market picks up, the long-term outlook remains grim. Demand for new homes in cities is expected to stay at 75 per cent below its 2017 peak in the coming years, due in part to a shrinking population, Goldman Sachs Group has estimated. BLOOMBERG
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