New warning signs emerge for China's property market
BEIJING — New data show China's massive property sector is still struggling to turn around, despite signs of recovery earlier this year.
«In a reversal from April, prices accelerated in the housing market but sales slowed,» the U.S.-based China Beige Book said in its report for May, released Tuesday. That's based on the research firm's survey of 1,085 businesses conducted from May 18 to 25.
«In commercial property, both pricing and transactions weakened sharply,» the report said. «Poor results in construction and reduced fiscal activity sent copper producers' May earnings and production into contraction.»
Beijing has eased its pressure on real estate developers in the last year, following a crackdown on their debt levels in August 2020. The property sector and related industries have accounted for more than a quarter of China's economy, according to Moody's estimates.
New home sales for the week ended May 28 grew by 11.8% from a year ago, a sharp slowdown from 24.8% growth a week earlier, pointed out Nomura's chief China economist Ting Lu in a report Monday. That's based on seven-day moving average data from Wind Information.
Both weeks' sales volume was lower than during the same period in 2019, prior to the pandemic, the report said.
Most of the sales decline stemmed from China's largest cities, the report said. Those so-called tier-1 cities have been a bright spot since people tend to move to urban centers for jobs.
Investors in Chinese property developers are also getting more skeptical about the market.
The Markit iBoxx index for China high-yield real estate bonds is back down to near where it was trading in November, when Beijing announced support for the sector through a «16-point plan.»
While that plan «has been
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