China's May Day home sales drop 47% from 2023, 30% from 2019 pre-pandemic levels

May Day home sales: China witnessed a notable downturn in home sales during the recent May Day holiday compared to the same period in 2023, with an average daily decrease of 47 per cent. This decline was even steeper, around 30 per cent, when compared to pre-pandemic levels in 2019 for the same holiday period, according to a recent private survey.

Data from the China Index Academy revealed that home sales dropped in 19 out of 22 surveyed cities over the five-day holiday, with particularly sharp declines exceeding 60 per cent in major cities like Guangzhou and Shanghai.

Real estate stimulus measures

In response to this ongoing challenge in the real estate sector, Chinese authorities have been implementing various measures to stimulate demand. However, analysts note that many of these efforts have been fragmented or provided only short-term relief.

During a politburo meeting last week, policymakers stressed the need to refine existing policies to address housing inventory issues. Suggestions included potential reductions in down payment ratios, mortgage interest rates, and transaction taxes and fees.

Local governments ease restrictions

Recent actions by local governments reflect a broader trend towards easing restrictions to stimulate home sales. For example, Chengdu recently relaxed home purchase limits, while Beijing announced "optimised measures" to facilitate new flat purchases in outer districts.

Looking ahead, analysts anticipate further relaxation of policies and increased government intervention, such as local authorities purchasing housing stock from developers to convert it into subsidised housing.

(With Reuters Inputs)