The FINANCIAL -- China's housing sales in the first four months of the year fell 2.2% from the same period a year earlier, an improvement from the first quarter's 9.2% decline as easier monetary policy draws some homebuyers back into the market, according to Nasdaq.
Housing sales in the January to April period totaled 1.49 trillion yuan ($240.3 billion), according to the National Bureau of Statistics on May 13.
Growth in property investment continued to moderate to 6.0% to 2.37 trillion yuan in the first four months this year, compared with the 8.5% growth in the first quarter. Property developers have been cutting back expansion plans and slowing construction projects as demand slipped, and policymakers remain worried that a prolonged property downturn would make things worse for the Chinese economy, which is already growing at its slowest pace in more than two decades.
On Sunday, the central bank cut benchmark interest rates for the third time in six months, a move that could help buttress the nascent signs of improvement in housing demand. Analysts said that housing sales are likely to improve in the second quarter, and anticipate further accommodative monetary measures from Beijing.
"With economic downside risks lingering, especially amid weak property construction starts and investment, we believe the government sees imminent need to prevent excess slippage," said Citi Research analysts in a recent note.
Though sales momentum has picked up, more so in first-tier cities such as Beijing and Shanghai where developers are still eyeing new projects, the situation in smaller Chinese cities remains bleak as frenetic building in recent years has left them saddled with excess inventory. Property starts and investment in real estate development nationwide are likely to remain weak amid heightened caution against overbuilding.
New construction starts across residential and commercial property in the first four months fell 17.3% to 358 million square meters, compared with the 18.4% decline recorded in the first quarter.