From two reporters based in China, the Wall Street Journal carries the article: China’s Property Slump Worsens. They say:
- China’s property slump is deepening despite growing government efforts to give home sales a lift (a 9.9% nationwide drop in housing sales by value in the first four months of the year, compared with a year earlier, and construction starts for housing have fallen 24.5% over the same period)
- Cities have eased government restrictions on home buying and lending for purchases in recent weeks
- The central government is also helping, entreating banks this month to lend more
But, despite this, potential buyers are holding off on purchases. Experts say that in addition to consumer sentiment, longer-term factors are in play.
- Cite overbuilding in a number of markets outside the richest citie
- Slower growth in incomes and in the broader economy (the per capita disposable income of urban households increased 9.7% in 2013, compared with 12.6% in 2012)
“The downturn this time is more serious compared to 2008 and 2011,” said Barclays Bank analyst Alvin Wong.
Weakness in real estate is seen as a significant threat to China’s decelerating economy. More at the Wall Street Journal (often gated, so if you’re unable to access the article try a search of Google news using the headline): China’s Property Slump Worsens
