Translated by: MOS English Team-Jack H

As news from Hong Kong on May 16th, China’s property sales fell at the fastest pace in about 16 years in April, despite a lot of measures implemented, aiming at revitalizing the world’s second-largest property market, but the COVID-19 lockdown further cooled down the market demand.

Since the beginning of this year, more than 80 cities have taken measures to boost demand, such as subsidies, lower mortgage rates and reductions in down payments, etc. However, dozens of cities, including Shanghai, have implemented long-term prevention measures against the COVID-19, resulting in the real estate outlook remaining very bleak. Shanghai is currently in the seventh week of lockdown, and no information is announced on when it will be lifted.

The chief economist Lu Ting with Nomura said, as no reopening in sight, a small cut in the mortgage rate floors has little support for potential first-time homebuyers.

As revealed in a report on Monday, despite benefits expected from this cut, the positive impact is likely to be very limited, as stringent anti-COVID measures appear to be in place for an unspecified time.

Uncertainty, lack of confidence, rising unemployment, and falling income growth are all contributing to the slump in new home sales, the sources added.

Hong Kong’s Hang Seng Mainland Property Index (.HSMPI) rose 1.2% in late morning trade, paring a 3.35% gain at the open, meanwhile, the broader market (HSI) fell 0.2%.

Real estate investment by developers across the country fell 2.7% year-on-year in the January-April period, following a 0.7% rise in the first three months of the year.

Real estate investment fell 10.1% in April from a year earlier, the biggest drop since December, after falling 2.4% in March.

New construction starts by gross floor area fell 44.19% year-on-year, the fastest pace since January-February 2020. New construction starts in January-April fell 26.3% year-on-year, following a 17.5% drop in the first quarter of this year.

Property developers hope the market bottoms out in the second quarter and are lowering investors’ expectations for full-year sales after a 50% slump in the first four months。

As informed in a report from Citibank that recovery in sales is key to liquidity, without which policy effects would be discounted. More ‘practical’ measures are needed before demand is permanently lost to achieve a faster recovery.

Japanese construction equipment maker Komatsu (6301.T) reported its machine usage in China fell 16.6% in April, extending a 17.3% drop in March.

Reference link: https://gnewsapp.com/post/p2553586/

Proofread by:  MachineCat

Edited and Posted by:  MachineCat

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