Despite some recent improvements, the Chinese real estate market is still facing challenges as the decline in sales of new commercial housing has narrowed in March. According to data released by the National Bureau of Statistics, the month-on-month decline in house prices also slowed slightly, providing some relief to Chinese policymakers.
However, weaknesses still persist in the latest data, with the year-on-year decline in housing prices widening despite policy support. The price of new commercial housing in 70 large and medium-sized cities in China fell by 0.34% month-on-month in March, compared to a 0.36% decline in February. While housing prices in 57 cities fell month-on-month in March, it was an improvement from the 59 cities in February.
Sales of newly built commercial housing fell by 27.6% year-on-year from January to March, a slight improvement from the 32.7% drop from January to February. The sales area of newly built commercial housing also saw a smaller decline year-on-year, indicating that the government’s demand-side support for domestic households is starting to have an impact.
Despite these improvements, China’s real estate market has been sluggish for several years, posing a challenge to the domestic economy. The government has introduced supportive policies to boost the industry, but economists suggest that the housing market slump has yet to bottom out.
In March, the sales price of newly built commercial housing in 70 large and medium-sized cities in China fell by 2.65% year-on-year, higher than the 1.9% decrease in February. Other real estate indicators, such as national real estate development investment and newly started housing construction, also continued to weaken.
Overall, while there are some signs of improvement in the Chinese real estate market, challenges remain as policymakers work to address the long-term slump in the industry.