BEIJING (Reuters) – Chinese recent home sales by floor area fell 37.7% year-on-year over the week-long National Day holiday ranging from Oct. 1, a non-public survey showed on Saturday, as tough COVID-19 curbs further dented fragile demand.
The property market has lurched from crisis to crisis, with slumping sales and developers defaulting on debts, while consumer confidence has been soured by repeated COVID-19 lockdowns and a mortgage boycott.
Amongst 20 cities monitored by the China Index Academy, the common each day floor area of homes sold in 4 tier-one cities all fell sharply from last yr’s holiday season, with declines of 64% in Beijing, 49% in Shenzhen and 47% in Shanghai.
The sharpest fall, of 80% on the yr, was within the eastern city of Hangzhou, higher than the remaining of the cities monitored.
“Homebuyers are still in a wait-and-see mood within the near term, and stimulus measures will take time to take effect,” said Chen Wenjing, an analyst from an independent real estate research firm.
“The brand new-home market is prone to steadily stabilise within the fourth quarter.”
Many Chinese cities advised against unnecessary trips for the general public holidays, worsening the impact of COVID-19 policies which have kept tens of thousands and thousands under lockdown.
China’s 422 million tourist trips over the National Day holiday this yr were down 18.2% from a yr earlier.
Beijing is ramping up efforts to prop up the distressed property market by easing mortgage rate floors, cutting the rate of interest on provident fund loans and offering individual income tax rebates for home buyers.
But with few signs that COVID-19 measures will ease within the near term, demand stays bleak.
“Property sales throughout the National Day holiday are the primary test of policy effectiveness,” analysts at ANZ said in a research note.
There was no reason to cheer up, they added, as “the policy effectiveness continues to be tied to several uncertain aspects which could limit the upside of any rebound”.
(Reporting by Liangping Gao and Ryan Woo; Editing by Clarence Fernandez)
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