Chinese home sales plunged 11 percent last month from a year ago amid declining demand despite attempts by the People’s Bank of China to ease mortgage lending restrictions.
The value of homes that were sold fell to 446.1 billion yuan ($72 billion) from 503 billion a year earlier, based on differences computed between the data in the January-May period and January-April period. The value of homes sold from January-May declined 10.2 percent to 1.97 trillion yuan from a year ago, reported the National Statistics Bureau.
The property slump has been weighing on economic growth, prompting the central bank to order the country’s biggest banks to hasten approving mortgages, especially to first-time property buyers.
“The property market is still not improving,” Jinsong Du, a property analyst at Credit Suisse Group AG in Hong Kong told Bloomberg. “Developers may cut prices further, but the question is whether that will attract buyers.”
Construction of new properties plunged 19 percent to 599.1 million square meters (6.4 billion square feet) in January-May period from a year ago.
Investments in office buildings, homes, malls, and other real estate categories rose 15 percent to 3.1 trillion yuan between January to May. Total sales of all kinds of property, commercial buildings included, plunged 8.5 percent to 2.37 trillion yuan over the first five months period from a year ago.
Home sales by area fell 9.2 percent in January-May period to 319.5 million square meters from a year ago, reported the statistics bureau.
Standard & Poor’s forecasts the volume of home sales will accelerate in the second half of 2014 and grow to 10 percent this year due to price cuts. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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