The Chinese real estate investment collapsed again in May, showing both la prolonged weakness of a key engine of economic growth is the challenges facing the country’s real estate developers, grappling with liquidity problems.
The real estate investments they fell by 7.2% in the first five months of 2023, worse than the 6.2% drop recorded in the January-April period and higher than the expectations of economists who forecast a 6.7% drop.
The negative data on real estate investments add to other recent signs of weakness: Home prices increased by just 0.1% per month in May, compared to 0.3% in April. And the recovery of housing supply lags behind that of sales.
Are policies to support the real estate sector coming?
The Chinese is considering stimulus measures aimed at supporting the real estate sectoras he reports Bloomberg, with the aim of reviving a sector that is not showing the improvement the economy needs. Authorities launched a 16-point bailout in November, but it failed to spark a major buying frenzy.
Il real estate market The country is still experiencing a “slow recovery,” said Fu Linhui, spokesman for the National Bureau of Statistics, during a press conference following the release of the data. And he said he expects the industry to gradually stabilize as they are implemented support policies and market expectations improve.
The repercussions of the collapse of the real estate sector on the economy
Il collapse of the real estate sector it has broad repercussions on the economy. Many projects have stalled, leaving some buyers stranded waiting for apartments they’ve already paid for. This affects employment and delays payments to suppliers and creditors. Several large developers are also looking to restructure their debts.