China’s property market woes continued to bite over the May Day public holiday, signalling the need for policymakers to step up measures to back the industry.
Average daily home sales in China during the period dropped 47% from a year earlier, and were down around 30% from pre-pandemic levels in 2019 for the same holiday period, a private survey showed on Monday.
Home sales fell in 19 of 22 surveyed cities during the five-day May Day compared to the same period of 2023. They were down more than 60% in the mega cities of Guangzhou and Shanghai, according to data from the China Index Academy, one of the country’s largest independent real estate researchers.
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Chinese authorities have been ramping up measures to prop up the troubled sector, but analysts say many of the policies are piecemeal in nature or have a limited, short-term impact.
The policymakers at a Politburo meeting last week highlighted they would improve policies to clear housing inventory.
“The new housing market is still under adjustment pressures,” said the research firm, adding “there is more room for lowering the downpayment ratio, reducing mortgage interest rates and transaction taxes and fees.”
The southwestern city of Chengdu eased home purchase limits last month and Beijing last week also announced “optimised measures” to allow some residents to buy a new flat in outer districts to boost home sales.
Analysts expect more easing policies and local governments to buy more housing stock from developers to turn them into subsidised housing.
Reuters, with additional editing by Vishakha Saxena
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