BEIJING — Prices of new homes in
China saw
their sharpest decline for seven years in October, data showed Wednesday, as
the real estate sector was battered by a debt crisis and a slowing economy.
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Property market has long served as a motor for
growth in China, on the backs of rising standards of living and high demand in
a country where home ownership is seen as a prerequisite for marriage.
But uncertainties linked to COVID-19, which have
cooled demand and weighed on household income, are hitting buyers, at a time when
several major real estate groups in China are in financial difficulty.
The price of new homes contracted 1.6 percent
year-on-year, their sharpest decline since August 2015, analysis of figures
from Beijing’s
National Bureau of Statistics (NBS) showed.
Real estate prices fell in 58 cities, according to
the NBS, which aggregates the average price in 70 cities across China.
Prices in the mega-cities of Beijing and Shanghai
bucked the trend.
The figures come after China’s banking regulator
unveiled sweeping measures to rescue the struggling property sector last week.
Those included credit support for debt-laden housing
developers, financial support to ensure the completion and handover of projects
to homeowners, and assistance for deferred-payment loans for buyers.
Friday’s measures emphasized “guaranteeing the
handover of buildings”, and ordered development banks to provide “special
loans” for the purpose, according to a copy of plans circulating online.
Property and
construction account for around a quarter of China’s gross domestic product,
but crippling debts have forced a series of developers to default on loans
while others have struggled to raise cash.
Analysts have raised fears that the crisis could yet
spread to the country’s financial sector at a time when Beijing’s hardline
zero-COVID policy has also put a lid on growth.
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