China home sales slump 47% during May day holiday

China home sales: China witnessed a decline in average daily home sales during the major May Day public holiday, plummeting by 47 per cent compared to the same period last year, : according to a private survey released on Monday. Additionally, these figures represent a decrease of approximately 30 per cent from pre-pandemic levels recorded in 2019 for the same holiday period.

Data from the China Index Academy, one of the nation's largest independent real estate researchers, revealed that home sales dropped in 19 out of 22 surveyed cities during the five-day May Day holiday, with mega-cities like Guangzhou and Shanghai witnessing declines of over 60 per cent.

Despite efforts by Chinese authorities to bolster the troubled real estate sector, such as implementing various measures, analysts remain skeptical about their effectiveness, viewing many policies as temporary or having limited impact in the long term.

During a politburo meeting last week, policymakers emphasized the need to enhance policies aimed at reducing housing inventory, acknowledging ongoing challenges in the new housing market.

The research firm noted that the new housing market continues to face adjustment pressures and suggested potential measures to stimulate demand, including lowering the downpayment ratio, reducing mortgage interest rates, and transaction taxes and fees.

In response to the sluggish market conditions, several cities have already taken steps to stimulate home sales. Chengdu recently eased home purchase restrictions, while Beijing announced "optimized measures" to enable some residents to purchase new flats in outer districts.

Analysts anticipate further easing policies and anticipate local governments to intervene by purchasing housing stock from developers and converting them into subsidized housing units in an effort to revitalize the market.

(With Reuters inputs)