(Bloomberg) -- China’s residential slump deepened in September before the government released a basket of measures to put a floor under the yearslong property crisis.
The value of new-home sales from the 100 biggest real estate companies fell about 37.7% from a year earlier to 251.7 billion yuan ($35.9 billion), faster than the 26.8% decline in August, according to preliminary data from China Real Estate Information Corp. Transactions gained 0.2% from August.
The weak data underscore why China’s Politburo last week made its most determined pledge yet to stabilize the real estate sector. Three of China’s so-called tier-1 cities swiftly followed through over the weekend by relaxing rules for homebuying, with Beijing joining in on Monday. The People’s Bank of China also allowed refinancing of as much as $5.3 trillion of existing mortgages for millions of families.
These efforts came after waning impact of the last rescue package unveiled in May, when China lowered borrowing costs and eased down-payment requirements. Authorities are now reacting to warnings that China risks missing its economic growth target of about 5% for 2024.
“Homebuyers have stayed on the sidelines in September, watching for property stimulus,” said Chen Wenjing, a research director at China Index Holdings. “Home-buying activity may pick up a bit in October after stepped-up support. However, more loosening is needed for the housing market nationwide to stop declining.”
On Sunday, the trading hub of Guangzhou became the first tier-1 city to remove all housing restrictions, saying it would stop reviewing buyers’ eligibility and no longer limit the number of homes owned. Shanghai, China’s financial hub, and Shenzhen, the southern city known for its tech industry, said they will let more people purchase residences in suburban areas, and allow some others to buy more homes.
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