Updated March 18th, 2024 at 09:29 IST

China's Jan-Feb property investment downturn softens

China's property investment fell by 9.0% YoY in the first two months of 2024, improving from December 2023's 24.0% drop, as per NBS data.

Reported by: Business Desk
China real estate | Image:Shutterstock
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China property trends: China's fragile housing market kicked off the year with reduced declines in property investment and sales, supported by government measures to address the prolonged downturn in the sector, official data revealed on Monday.

Property investment in China dropped by 9.0 per cent year-on-year (YoY) in the first two months of 2024, a notable improvement from the 24.0 per cent fall recorded in December 2023, according to data from the National Bureau of Statistics (NBS).

Floor area sales

Similarly, property sales by floor area saw a 20.5 per cent decline in January-February compared to the same period last year, which was less severe than the 23.0 per cent decrease seen in December.

Despite these relatively better figures, the latest official data showed that the sector is still struggling to stabilise, with home prices declining by 0.3 per cent month-on-month (MoM) in February, consistent with the drop observed in January.

To support the fragile property market, China has implemented various measures, including the introduction of a "whitelist" mechanism in January to direct funds from state banks into selected local property projects deemed suitable for financing support. Additionally, the country recently announced its largest-ever reduction in benchmark mortgage rates to provide further support to the struggling real estate sector.

However, market sentiment remains subdued, with declines observed in home buying, financing, and construction starts for real estate firms.

Loan contraction continues

Household loans, mainly mortgages, contracted by 590.7 billion yuan ($82.08 billion) in February, following an increase of 980.1 billion yuan in January, according to Reuters calculations based on central bank data.

Furthermore, new construction starts, measured by floor area, plummeted by 29.7 per cent YoY, following an 11.56 per cent decline in December 2023. Meanwhile, funds raised by China's property developers saw a 24.1 per cent decrease compared to the previous year, after a 17.8 per cent drop in December.

(With Reuters Inputs)

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Published March 18th, 2024 at 09:29 IST