China’s new home sales slide for 10th month with buyers sidelined, lending push failing to halt liquidity crisis
- New home sales fell 46 per cent in March from a year earlier, showing no imminent turnaround in market’s three-year slump, analysts say
- A liquidity crisis has persisted into the new year as China Vanke, Country Garden and Longfor struggled to arrest a slide in earnings
Sales at the nation’s 100 biggest home builders tumbled 46 per cent to 358.3 billion yuan (US$49.6 billion) in March from a year earlier, according to data published by China Real Estate Information Corp (CRIC), following an annualised 60 per cent slide in February. First-quarter sales fell 48 per cent to 779.2 billion yuan, it added.
March’s decline marked the 10th in a row of shrinking sales. It was almost double the figure a month earlier because of the low-base effect when new home sales in February hit the lowest level since 2019.
“Sentiment is still weak, demand is still lacklustre and the market outlook is still unclear at this point,” CRIC analysts said in the report published on Sunday. “We do not expect to see a significant turnaround in terms of supply and demand in the coming months. Developers will continue to face pressure on home sales.”
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The industry has struggled to rebound from China’s “three red lines” policy unveiled in August 2020, a measure that shut the nation’s weakest borrowers out of the capital market. A liquidity squeeze has since triggered an unprecedented crisis as junk-rated developers defaulted on more than US$160 billion of bonds since then, according to a Goldman Sachs estimate.
