In the first four months, China’s real estate development investment fell by 2.7% year-on-year, and commercial housing sales fell by nearly 30% year-on-year.
Affected by the epidemic slowing down the recovery process of the property market, the core indicators of China’s real estate weakened across the board in the first four months of this year.
The growth rate of real estate development investment turned negative year-on-year. According to data released by the National Bureau of Statistics of China on the 16th, from January to April, China’s real estate development investment was 3,915.4 billion yuan (RMB, the same below), a year-on-year decrease of 2.7%. This is the first time since June 2020 that this indicator has experienced a negative growth.
Although since the beginning of the year, various localities have frequently introduced new policies for the property market to support rigid and improved housing demand, but from the results, the investment confidence of housing companies has not recovered, coupled with the interference of the epidemic, the market recovery process has slowed down. It is expected that according to the current epidemic situation, the growth rate of development investment in May is still difficult to rebound significantly.
Property sales also fell further. From January to April, the sales area of ​​commercial housing in China was 397.68 million square meters, down 20.9% year-on-year; the sales volume of commercial housing was 3,778.9 billion yuan, down 29.5%. Under the influence of the epidemic, the year-on-year decline in the eastern and northeastern regions continued to exceed that of other regions.
The decline in sales led to an increase in housing inventory. At the end of April, the area of ​​commercial housing for sale in China was 557.35 million square meters, a year-on-year increase of 8.4%. Among them, the residential area for sale increased by 14.8%.
Xu Xiaole, chief market analyst at Shell Research Institute, believes that in addition to being dragged down by the epidemic, weak market expectations are the main reason for the downturn in the sales market. Since the beginning of this year, more than 100 cities have issued property market support policies, but the repeated epidemics and geopolitical conflicts have increased the downward pressure on the economy. The decline in income expectations has led to a reduction in residents’ risk appetite, and the recovery of market confidence has been hindered.
On May 15, the central bank and the China Banking and Insurance Regulatory Commission jointly issued a notice to adjust the lower limit of the interest rate for the first home commercial loan to no less than 20 basis points from the market quoted interest rate (LPR) for loans with a maturity of more than 5 years, that is: from 4.6% to 4.4% %. The lower limit of the interest rate policy for the second set of housing loans shall be implemented in accordance with the current regulations.
Xu Xiaole said that although the lower limit of the interest rate for the second set has not been adjusted, most cities in the early stage have canceled the “recognizing a house and subscribing for a loan”, and the demand for changing a house is implemented according to the loan of the first set. Therefore, the lower limit of the interest rate of the first set has been lowered this time, leaving the bank to reduce the interest rate of the mortgage. Space, which is conducive to reducing the cost of housing purchases for rigid and improved needs.
Chen Xiao said that since the beginning of this year, the market recovery has been less than expected. It is expected that as the haze of the epidemic gradually dissipates, the policy effects from the central to the local will gradually appear, and the sales data is expected to usher in a significant rebound after June this year.