More bad news for China’s property market. Not only is the People’s Daily quashing hopes for a real estate stimulus, but data from 42 of the country’s most significant cities is showing a declining trend for property sales in the first half of June.
Home sales from the 42 cities, monitored by China Confidential, fell 16 per cent in the first 15 days of the month from the same period in May. This followed some signs of recovery in May, when transactions rose 4 per cent month on month.
On a year on year basis, property unit sales fell 29 per cent, representing a deepening of the declining trend seen in May – when sales were down 14 per cent year on year – and in April, when sales were down 23 per cent.
The weakening sales in the first half of June was seen across city tiers, with transaction volumes falling 28 per cent, 28 per cent and 26 per cent in first, second and third tier cities respectively.
With newly-built developments coming on stream as sales ease, the amount of unsold property remains at elevated levels.
Residential floor space available for sale in 14 cities monitored by China Confidential, a research service at the Financial Times, was up 35 per cent year on year in the first 15 days of June, a similar rate of growth to that recorded in May.
Inventory growth in second- and third-tier cities continues to outpace that in larger areas. Floor space available for sale in second- and third-tier cities increased 43 per cent year on year, compared with a 19 per cent year on year expansion in first-tier cities.
The new data came as the People’s Daily, the Communist Party’s main mouthpiece, said in a commentary on Monday that the property market was in a “normal adjustment period” and accused domestic developers, speculators and foreign banks of exaggerating the slowdown in order to put pressure on authorities to adopt heavy-handed stimulus policies.
“We must be on guard against the ulterior motives of those who are singing short the market – to destabilise the market, mislead policy and satisfy their selfish interests,” the paper said.
Average home prices in China fell 0.2 per cent in May from April, data showed last week, the country’s first monthly decline in two years, though prices still rose 5.6 per cent on a yearly basis.