Mild real estate recovery seen turning substantial

0 Comment(s)Print E-mail China Daily, May 17, 2023
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The real estate recovery, though still mild, is likely to become substantial on the back of policy incentives and higher sales later this year, officials and experts said on Tuesday after digesting the latest industry data released by the National Bureau of Statistics.

NBS data showed property sales and investment continued to decline year-on-year between January and April, with property sales recovering faster.

Property investment in the first four months fell 6.2 percent year-on-year, widening from a 5.8 percent year-on-year decline in the first quarter. Sales of commercial properties by floor area slid 0.4 percent over the same period, compared to a 1.8 percent fall in the first quarter.

Specifically, home sales by residential area went up by 2.7 percent in the first four months, while residential home sales by value rose 11.8 percent year-on-year in the January-April period, a faster recovery from the first quarter.

At a news conference on Tuesday, Fu Linghui, the NBS spokesperson, said that despite signs of recovery in demand, both investment and construction in the property sector are still contracting, and the entire property market is experiencing a stage of adjustment.

"Further efforts are required to keep the real estate market stable, and to ensure and improve people's livelihoods," he said. "We expect that in the next stage, backed by overall economic recovery, policy incentives targeting the real estate market will see tangible effects. Market expectation will thus improve, and the housing market is expected to gradually stabilize."

He noted that property sales in hot-spot property markets such as the Beijing-Tianjin-Hebei region, the Yangtze River Delta region and the Guangdong-Hong Kong-Macao Greater Bay Area, turned out to be more robust than elsewhere. With more vital buying capacity, home prices in first-tier cities are climbing faster than second- and third-tier cities.

He said the pickup in home sales has helped ease the liquidity crunch faced by real estate developers. In the first four months, funds raised by property developers fell by 6.4 percent year-on-year, narrowing from the 9 percent drop in the first quarter.

"The new figures of both property sales and investment show that currently, property developers are still focusing on completing and delivering overdue housing projects, and new construction investment remains subdued," said Liu Lijie, a market analyst from the Beike Research Institute.

"Going forward, we expect the housing market will lead to a quicker cash return for property developers, and their liability status will improve. This will also improve market confidence in the context of new project construction and investment," Liu said.

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