China's property sector faces steeper decline, undermining economic confidence

The decline in property investment and sales in China accelerated significantly in April, raising concerns about the country's economic recovery. Property investment experienced a year-on-year decrease of 16.2%, the sharpest decline since November 2022, while property sales saw a significant drop of 11.8% compared to the same period last year. These declines reflect the ongoing challenges faced by the Chinese property sector, which has been impacted by strict regulations and financing crises.

Despite some signs of stabilization in the real estate sector, such as a slight increase in housing prices, there remains uncertainty about the strength of this upward trend. Recent data, including lower-than-expected growth in industrial output and retail sales, has failed to alleviate concerns about the Chinese economy. The significant decline in property sales in April highlights the fragility of the market recovery, emphasizing the need for additional policies to stimulate the sector.

To revive the property market, which plays a crucial role in China's GDP, authorities in Beijing have implemented various measures, including encouraging brokerage sectors to lower transaction fees and ensuring timely delivery of new homes. The commencement of new construction projects has declined, and funds raised by Chinese developers have also dropped. Moody's revised the outlook for China's real estate industry from negative to stable, expecting regional variations in the recovery and improved funding conditions due to policy support.

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China's property sector faces steeper decline, undermining economic confidence

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