What’s new: Sales of China’s top 50 property developers declined 47% in the first quarter from a year earlier as the embattled industry continued struggling despite pledges of support from the Chinese government.
Sales by the 50 biggest developers in the first quarter were also lower than in the same period in 2020, when the Covid-19 pandemic first hit the country and China’s economy contracted for the first time in 28 years, data from real estate information database CRIC showed.
Marketing staff at multiple developers told Caixin that they achieved only about 60% of their first-quarter sales goals.
March and April are usually the best selling season for the real estate market. During the first few months, many regions across China have been hit by new Covid-19 flare-ups and implemented lockdowns, which have slashed the number of visits to new property projects. In Shenzhen, sales offices at property companies have been closed since mid-March due to pandemic prevention and control measures.
But the pandemic is not the major reason for the sharp drop in housing sales. Potential home buyers’ expectations about the macro economy, future income, future cash and the job outlook have turned pessimistic, a sales representative at a state-owned developer told Caixin.
The background: China’s economy has taken a hit in recent months as real estate has weakened, prompting Beijing to shift its focus to stabilizing growth. The property industry accounts for about a quarter of the country’s economy.
Authorities have rolled out a series of measures to boost the real estate industry, including dropping a plan to expand a property tax trial, reducing mortgage rates and providing better access to loans for builders in some cities and provinces.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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