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China property: government likely to keep market support coming as April home sales tank, say analysts
- CRIC expects 25 key listed developers to see April’s sales fall by an average of 17 per cent from the previous month
- ‘Given that property is a key pillar of the economy, we believe there are more supportive measures to come in the rest of the year,’ says analyst
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Beijing is likely to keep rolling out incentives to support mainland China’s property sector as April’s home sales look set to tank, according to analysts.
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The preliminary sales in April for key Chinese developers “look so-so”, said Raymond Cheng, managing director of CGS-CIMB Securities, citing data from CRIC, a major real estate broker in China.
“Given that property is one of the key pillars of the Chinese economy, we believe that there are more supportive measures to come in the rest of the year if sales for the sector remain weak.”
CRIC expects 25 key listed developers to see April’s sales fall by an average of 17 per cent from the previous month. Guangzhou R&F Properties looks set to suffer a 46 per cent plunge in sales to 2.11 billion yuan, the largest drop among the homebuilders, according to data compiled by CGS-CIMB Securities.
Cheng attributed this to weak homebuyers’ confidence as a result of a stuttering economy and increasing jobless rate in China, as well as a high base in March. On an annual basis the increase is 35 per cent, which is misleading because of “a very low base” in April 2022 when the market was hobbled by stringent Covid-19 policies.
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China’s property industry, which is deemed too big to fail as it and linked sectors account for about a quarter of the nation’s economy, has been in recovery after Beijing took a slew of measures to bail out the sector. These included scrapping restrictions on home purchases in some cities, cutting mortgage rates and facilitating funding access to ease the liquidity squeeze on developers.
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