The value of new home sales from the 100 largest real estate firms fell 19.7% year-on-year to 279.07 billion yuan ($38.6 billion), faster than the 17% decline in June, according to preliminary data from China Real Estate Information Corp.
Transactions fell 36.4% from June after recording significant increases in April and May.
Residential building in Shanghai. Photographer: Raul Ariano/Bloomberg.
The rapid slide underscores how China’s recent bailout is falling short of expectations. Bloomberg Economics estimates that the central bank’s $42 billion re-lending program could help local governments buy just 0.8 percent of China’s 60 billion unsold homes.
Meanwhile, the psychology of buyers is also significantly damaged.
The real estate sector continues to drag on China’s economic growth, which is expected to miss its official target of 5% this year, according to Bloomberg Economics estimates.
In June, two credit rating firms lowered their forecasts for China’s property market. S&P Global Ratings expects home sales to fall 15% this year, more than the 5% drop it previously predicted.
Meanwhile, Fitch Ratings cut its annual sales estimate to a 15%-20% decline, worse than its previous estimate of a 5%-10% decline.
Three years ago, China tightened restrictions on the sector due to concerns about a real estate bubble. During that time, many large Chinese real estate companies defaulted, with a total of $124 billion in defaulted USD bonds.
One-time “giants” such as Chia Evergrande, Country Garden and China Vanke have been pushed to the brink of collapse.
The crisis threatens social stability as homebuyer protests rage across the country and unsold housing stock hits an eight-year high. Countless real estate projects across China are on hold and some 5 million workers in the industry face unemployment or reduced income.
Khanh Vy (According to Bloomberg)
Source: https://www.congluan.vn/doanh-so-ban-nha-tai-trung-quoc-tiep-tuc-giam-post305770.html
Comment (0)