BEIJING — Chinese new home sales by floor area fell 37.7% year-on-year over the week-long National Day holiday starting from Oct. 1, a private survey showed on Saturday, as tough COVID-19 curbs further dented fragile demand.
The property market has lurched from crisis to crisis, with slumping sales and developers defaulting on debts, while consumer confidence has been soured by repeated COVID-19 lockdowns and a mortgage boycott.
Among 20 cities monitored by the China Index Academy, the average daily floor area of homes sold in four tier-one cities all fell sharply from last year’s holiday season, with declines of 64% in Beijing, 49% in Shenzhen and 47% in Shanghai .
The sharpest fall, of 80% on the year, was in the eastern city of Hangzhou, higher than the rest of the cities monitored.
“Homebuyers are still in a wait-and-see mood in the near term, and stimulus measures will take time to take effect,” said Chen Wenjing, an analyst from an independent real estate research firm.
“The new-home market is likely to gradually stabilize in the fourth quarter.”
Many Chinese cities advised against unnecessary trips for the public holidays, worsening the impact of COVID-19 policies that have kept tens of millions under lockdown.
China’s 422 million tourist trips over the National Day holiday this year were down 18.2% from a year earlier.
Beijing is ramping up efforts to prop up the distressed property market by easing mortgage rate floors, cutting the interest rate on provident fund loans and offering individual income tax rebates for home buyers.
But with few signs that COVID-19 measures will ease in the near term, demand remains bleak.
“Property sales during the National Day holiday are the first test of policy effectiveness,” analysts at ANZ said in a research note.
There was no reason to cheer up, they added, as “the policy effectiveness is still tied to several uncertain factors which could limit the upside of any rebound.” (Reporting by Liangping Gao and Ryan Woo; Editing by Clarence Fernandez)