by Liangping Gao and Ryan Woo
BEIJING, Sept 16 (Reuters) – China’s property market continued to deteriorate in August, official statistics showed on Friday, with prices, sales volumes and investment falling, a sign that policy measures authorities in recent months are struggling to revive it.
The prices of new homes, which had remained stable in June and July, fell by 0.3% over one month according to Reuters calculations made on the basis of data from the National Bureau of Statistics.
Over one year, these prices are down for the fourth consecutive month, by 1.3% in August, their biggest drop on an annual basis since 2015.
The worsening difficulties of the Chinese real estate market are weighing on the outlook for the whole economy of the country, which narrowly escaped a contraction in the second quarter.
The sector, which has long been one of the engines of growth in China, has had a string of crises since 2020 and the authorities are trying to force the most indebted promoters to clean up their balance sheets.
“The sector hasn’t bottomed out yet, but it’s getting close,” said Zhang Dawei, chief analyst at real estate agency network Centaline.
Among the measures implemented since the beginning of the year by Beijing include a relaxation of the rules governing real estate purchases, a reduction in the minimum contribution, a drop in credit rates and an overall reduction in selling prices.
But authorities may need to do even more in the country’s biggest metropolises, such as Beijing and Shanghai, and in second-tier cities, to stabilize the market and restore the confidence of potential buyers.
This confidence has suffered in particular since June from calls for a boycott of credit chances on unfinished projects, which have forced developers to stop work for lack of cash, a vicious circle aggravated in some cities by health restrictions.
Separate statistics also released on Friday show home sales fell in August, their 13th consecutive month of decline.
Areas sold last month fell by 22.58% compared to August 2021 according to Reuters calculations. And over the first eight months of the year, the drop was 23%.
Investments in real estate also fell in August, by 13.8% over one year, such as new housing starts, which showed a drop of 45.7% in surface area compared to August 2021, their largest drop. for nearly ten years.
The stock market index of real estate securities of mainland China ended the day down 3.68% after the publication of these figures while its Hong Kong equivalent yielded 2.77%.
(Report Liangping Gao and Ryan Woo; , French version Marc Angrand, told by Kate Entringer)