China’s home buyers are waiting out the property slump
Real Estate Information, a private industry tracker. The sales were down a third from June and from the same period a year ago. They were also 59% less than the total in July 2021.
July tends to be a slower month for new-home sales in China, because developers often try to boost June sales to report better first-half results. In June, a developer in the eastern city of Hangzhou offered to give people 2.2 pounds of gold—worth the equivalent of about $70,000—if they purchased homes exceeding 1,000 square feet in floor area. The magnitude of the latest declines was still surprising.
Country Garden’s July contracted sales plunged 60% from a year ago, a far bigger drop than in the past few months. Yan, who is based in the city of Zhuhai in China’s southern Guangdong province, said his team’s sales in July were less than a quarter of their monthly average for the first half, even though his company offered bigger discounts on the properties it marketed. The wait-and-see attitude of home buyers is worrying, say economists, as it could prolong the recovery in the housing market and correspondingly, the Chinese economy.
China has also slipped into deflation, which could be damaging if falling consumer prices make people expect to pay less for a range of goods. To draw home buyers, property developers have been doling out perks like free parking and household appliances. Property agents said that has trained people to expect such freebies, and sales decline whenever the deals go away.
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