Kathmandu. The real estate sector, once considered the engine of China’s economy, is now in the grip of a recession. There has been a significant decline in home sales in China.
Home sales in October fell 42% from a year earlier. The decline comes despite the Chinese government taking steps to support the property market. This means that government support has also failed to help the property market.
New home sales totaled $35.6 billion by the 100 largest real estate companies in October, according to data from the China Real Estate Information Corporation. This is a decrease of 41.9 percent compared to the previous year. Sales were slightly steadyer last month. But now it has happened again.
Impact of job loss
According to Bloomberg, China’s property market has been struggling for more than 4 years. Sales have been steadily declining since the second quarter. While some home-buying rules have been relaxed in major cities, it has not immediately boosted public confidence. One reason for this is the weakening job market in China. This is discouraging people from buying homes.
Difficulty in repaying loans to developers{
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September and October are generally the best months to buy a property. However, the recession that began in 2021 continues. Many property developers are finding it difficult to pay off their loans or complete presold projects. This is further weakening the confidence of home buyers.
How much government effort?
To boost the property market, the Chinese government has taken a number of initiatives, including lowering home loan interest rates, easing home purchase rules, and redeveloping urban villages. However, these measures have had no visible effect.
Zhang Dawei, chief analyst at Centline Property Agency, told Reuters that the government could take further steps to boost demand in the fourth quarter. For example, home loans can lower interest rates and increase personal income tax breaks.
Meanwhile, Nomura analysts recently said that the Chinese government will need to more seriously address the impact of the slowdown in the property market in its upcoming five-year plan for 2026-2030. Discussions are also underway to promote home purchase grants and tax cuts.
Demand for government assistance increased
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The collapse in the property market is fueling the demand for more government support. Fitch director Lulu Shi said new home sales in China could fall by an additional 15 per cent depending on the area. “Sales prices could fall by another 7 per cent to 10 per cent next year,” she said. ’
