China's real estate sector struggles despite government stimulus
Date
8/15/2024 4:22:20 AM
(MENAFN) China's property investment dropped by 10.2 percent in the first seven months of the year compared to the same period last year, a slight acceleration from the 10.1 percent decline recorded in the January-June period. This continued downturn comes despite a series of government-initiated stimulus measures aimed at revitalizing market sentiment. The persistent decline in investment highlights the ongoing challenges facing China's property sector, which has been a crucial pillar of the nation's Economy but now appears to be grappling with deep-rooted issues. These include waning buyer confidence and a sluggish response to policy interventions.
Property sales, measured by area, also reflected the sector's difficulties, falling 18.6 percent year-on-year in the January-July period. Although this is a slight improvement from the 19 percent decline seen in the first half of the year, it still underscores the weak demand in the market. New construction project starts, a key indicator of future growth in the sector, fell by 23.2 percent year-on-year, closely mirroring the 23.7 percent decline reported for the first half of the year. These figures from China's National Bureau of Statistics, released on Thursday, paint a bleak picture of the property market's recovery prospects, as developers and investors remain cautious amid ongoing economic uncertainties.
The challenges extend to the financial side as well, with funds raised by Chinese property developers falling by 21.3 percent compared to the previous year, following a 22.6 percent drop in the January-June period. Despite Chinese authorities intensifying their efforts to support the beleaguered property sector—through measures such as reducing purchase costs and lowering mortgage rates—the impact of these initiatives has been limited. The lack of a substantial rebound suggests that deeper structural issues may be at play, and the sector may require more robust and targeted interventions to achieve a genuine and sustained recovery.
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