China home sales falter amid dented buyer confidence, raising threat of more developer liquidity struggles
- June sales plunged 28.1 per cent year on year among the 100 largest developers, according to CRIC
- The poor results in a normally strong month have erased gains from earlier in the year, according to China Index Academy
Grim figures for home sales in June in China show that the sector remains in crisis and will continue to weigh on the country’s economy as developers suffer amid a lack of buyer confidence.
Sales in June fell 28.1 per cent among the 100 largest developers by sales, compared to the same month last year when Covid restrictions were widely in place, according to CRIC, one of China’s largest real estate brokers. Sales rose 8.5 per cent month on month – the lowest recorded growth in what is normally a buoyant month.
Looking at just the top 25 developers selected by CGS-CIMB Securities, the news is even worse, as June sales fell 38 per cent year on year, said the firm’s managing director Raymond Cheng, citing CRIC’s data.
“We think further sales declines since April will lead to more liquidity issues for the sector and hurt China’s economic recovery as well as job creation,” he said. “Typically, developers report double-digit growth of 10 to 20 per cent year on year or month on month for June, before the liquidity issues started.”
Looking at the first half of 2023, home sales by the 100 largest developers grew only 0.1 per cent compared with the same period last year, according to data from China Index Academy (CIA), one of the country’s largest independent real estate research firms.
In fact hopes of a recovery have petered out as growth of 12.8 per cent across the first four months declined to 8.4 per cent across the first five months before plunging to essentially no growth across the first six months, according to the CIA data.
