China’s home sales declined 18 percent last month, as credit tightened, making it difficult for clients to access finances for new home purchases.
The prices of homes that were sold fell to 418 billion yuan ($67 billion) in April from 509 billion yuan a month earlier, reported the National Statistics Bureau. The value of homes sold in the first four months of the year through April declined 9.9 percent to 1.53 trillion yuan from a year ago.
Construction of new properties plunged 22 percent to 432 million square metres (4.6 billion sq. ft) between January and April from a year ago. When measured by area, home sales tumbled 8.6 percent from a year earlier, according to NBS data.
Investments in office buildings, homes, malls and other real estate properties grew 16 percent to 2.23 trillion yuan from January to April. Total sales of all types of properties, including malls and commercial buildings, declined 7.8 percent to 1.83 trillion yuan from a year ago.
“Slowing property data is testing the tolerance of the government on the economic slowdown,” Dai Fang, a property analyst at Zheshang Securities Co in Shanghai told Bloomberg. “Local government easing measures are meaningless for a recovery in the market. The key issue is when the credit will be loosened.”
Some analysts have voiced concerns of a possibility of a property bubble in China this year, owing to tightening regulatory oversight and monetary policy. Nonetheless, more than six minor Chinese cities have laid the groundwork to stimulate growth in home sales. Zhengzhou, a city in China’s northern Henan province, recently announced measures to encourage home buys by low income to middle income consumers. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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