China’s home sales rose for the second consecutive month in May as demand got a boost from three interest-rate cuts and a removal of property curbs since November.
New-home sales jumped 30 percent to 582 billion yuan ($94 billion) from a year earlier, faster than the 16 percent year-on-year increase in April, according to Bloomberg calculations based on data from the National Bureau of Statistics on Thursday.
A 0.2 percent decline in the sales volume in the January-to-May period narrowed from a 4.8 percent slide in the the first four months, showing an “evident recovery,” the bureau said in a statement on its website.
China eased mortgage policies and down-payment requirements for some homebuyers at the end of March, adding to easing measures since September to aid an industry that has been weighing on economic growth. New-home sales rose for the first time this year in April.
The strong monthly sales compensated for previous weakness because of prolonged property tightening, said Yang Zhao, Hong Kong-based chief China economist at Nomura Holdings Inc. “Property investment kept falling in May and land sales didn’t show an obvious turnaround.”
Property development investment grew 5.1 percent in the first five months of this year, slower than the 6 percent in the January-to-April period. Developers bought 31 percent less land in the period and new construction starts slumped 16 percent.
“If only speaking from the perspective of sales, the worst is over,” Zhao said. For property investment, “a correction is far from over.”
— With assistance by Emma Dong