(Bloomberg) -- China’s residential property sales rose in October, the first on-year increase of 2024, as the government’s latest stimulus blitz brought back buyers.
The value of new-home sales from the 100 biggest real estate companies rose 7.1% from a year earlier to 435.5 billion yuan ($61.2 billion), reversing from a 37.7% slump in September, according to preliminary data from China Real Estate Information Corp. Sales surged 73% from a month earlier.
The improvement came after China unleashed its strongest package of measures, including cutting borrowing costs on existing mortgages, relaxing buying curbs in big cities and easing down payment requirements. Home sales jumped during the week-long National Day celebrations, with developers handing out more promotions.
The residential market “turned more active in October as homebuyers regained some confidence,” said Chen Wenjing, a research director at China Index Holdings. “However, more efforts are needed to help the sector stem its decline.”
Analysts are expecting more policy support to ensure China’s roughly 5% economic growth target this year. President Xi Jinping reiterated the need to hit that goal in the lead up to a key legislative meeting next week.
International Monetary Fund director Kristalina Georgieva has warned that China’s annual growth could drop to “way below” 4% in the future without reforms to lift domestic consumption. A yearslong property crash has wiped out billions of dollars in household wealth, adding to deflationary pressures.
In late September, the trading hub of Guangzhou became the first tier-1 city to remove all restrictions buying residential property. The other top-tier cities Beijing, Shanghai and Shenzhen allowed more people to purchase residences in suburban areas, while letting some others to buy more homes.
{{/usCountry}}In late September, the trading hub of Guangzhou became the first tier-1 city to remove all restrictions buying residential property. The other top-tier cities Beijing, Shanghai and Shenzhen allowed more people to purchase residences in suburban areas, while letting some others to buy more homes.
{{/usCountry}}The People’s Bank of China also greenlit the refinancing of as much as $5.3 trillion of existing mortgages for millions of families.
Cash-strapped developers are counting on a sales revival to persuade debt holders. China Vanke Co. suffered another hefty loss in the third quarter, with its contract sales down 35% in the first nine months from the same period a year earlier. Country Garden Holdings Co. also won bondholder approval to extend onshore bond payments after failing to secure enough cash.
Separately, China’s central bank injected $70 billion worth of cash into money markets this month via a newly established policy tool, in a step to ease liquidity stresses in the fragile economy and encourage banks to lend.
--With assistance from Jacob Gu and Philip Glamann.
(Adds central bank move at end)
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