China’s home sales fell 11 percent in May from a year earlier amid slowing demand even after the central bank ordered easing of mortgage lending.
The value of homes sold declined to 446.1 billion yuan ($72 billion) from 503 billion yuan in the same month in 2013, according to the difference between National Statistics Bureau data for the first half of the year and the first five months. The value of sales from January to May fell 10.2 percent to 1.97 trillion yuan from a year earlier, the data showed.
China’s housing market, which faces a surplus of empty units as prices fall, has become a drag on the growth of the world’s second-largest economy. The central bank last month called on the nation’s biggest lenders to accelerate the granting of mortgages, urging them to give priority to first-home buyers.
“The property market is still not improving,” said Jinsong Du, a Hong Kong-based property analyst at Credit Suisse Group AG. “Developers may cut prices further, but the question is whether that will attract buyers.”
Home prices fell for the first time on a monthly basis in May since June 2012, according to SouFun Holdings Ltd., China’s biggest real estate website owner.
New property construction fell 19 percent to 599.1 million square meters (6.4 billion square feet) in the first five months of 2014 from a year earlier, today’s data showed.
Investments in homes, office buildings, malls and other types of real estate climbed 15 percent to 3.1 trillion yuan in the January to May period, according to the statistics bureau. Total property sales, including commercial buildings, fell 8.5 percent to 2.37 trillion yuan in the period from a year earlier.
Home sales by area declined 9.2 percent in the first five months to 319.5 million square meters from the same period a year earlier, the government data showed today.
Chinese developers are facing rising pressure on sales as they only achieved 30 percent of their full-year sales target by May, Barclays Plc’s Hong Kong-based property analysts, led by Alvin Wong, wrote in a report yesterday. Wong tracks 28 developers.
The housing vacancy ratio in urban areas was as high as 22.4 percent in 2013, Gan Li, the director of the Survey and Research Center for China Household Finance and a professor at Southwestern University of Finance and Economics, said this week at his verified microblog, citing data from the center’s research report.
Some developers are allowing buyers longer time to pay the 30 percent minimum down payment, while some are even offering zero down payment, according to state media and statements by government agencies and developers.
Home sales volume will improve in the second half of the year and rise 10 percent for the full year, boosted by price cuts, Standard & Poor’s said in a report this week.
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