China's real estate shows sign of improvement after months of contraction
Published: Oct 24, 2022 08:59 PM
Apartments are seen in East China's Fujian Province. China's housing market was generally stable in August, as new home prices in four first-tier cities -- Beijing, Shanghai, Guangzhou and Shenzhen -- rose 0.6 percent montn-on-month, up 0.1 percentage points from a month earlier, according to the National Bureau of Statistics. Photo: cnsphoto

Apartments are seen in East China's Fujian Province.  Photo: cnsphoto

China's real estate sector has likely bottomed out, industry analysts said on Monday, after new data showed that the pace of housing sales decline has slowed. 

During the first nine months, sales of commercial housing fell 26.3 percent year-on-year to 9.94 trillion yuan ($1.37 trillion), the National Bureau of Statistics (NBS) said.

Sales hit bottom during the period from January to May, falling 31.5 percent. The pace of decline eased to 28.9 percent during the January-June period.

Sales of commercial housing totaled 1.014 billion square meters from January to September, down 22.2 percent year-on-year -- but that was better than the 23.6-percent decline during the January-May period. 

The housing sales in September alone rose 39.3 percent from August, showing an obvious upturn, NBS data showed.

Real estate development investment expanded month-on-month in August and September, although investment during the first three quarters fell 8 percent on a yearly basis to reach 10.36 trillion yuan.

Although the contraction of property sales in recent months affected economic growth, the situation has begun to improve, Tian Yun, a Beijing-based economist, told the Global Times on Monday.

There have been other positive signs. On the supply side, the total value of land purchase by China's top 50 real estate developers surged 130.2 percent month-on-month in September. On the demand side, sales of second-hand homes in South China's Shenzhen rose 275 percent year-on-year, data showed.

The willingness to buy a home also increased among urban residents. According to the Urban Depositor Survey Report for the third quarter, which was released on October 9 by the central bank, 17.1 percent of respondents planned to spend more on housing purchases in the next three months, up from 16.9 percent in the second quarter. 

From the overall data, one can see that pressure on the supply side is slightly greater, and the price side is relatively optimistic, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Monday.

"Cities are actively preventing any stall in real estate investment. But the housing price index data generally show a cooling, so we should be vigilant," said Yan.

A continuous boost in housing transactions is crucial to averting the cooling cycle, said Yan. Cities should prepare a new round of pro-growth policies in the fourth quarter. For example, dozens of Chinese cities have cut home mortgage rates to below 3 percent.

Global Times