China’s home sales slump persisted in May as Covid outbreaks in key cities overshadowed efforts to revive buyer confidence. New-home sales plummeted 59% in May from a year earlier for China’s 100 biggest real estate developers, according to preliminary data from China Real Estate Information Corp. The drop matched April’s decline as the biggest this year, reports Caixin.
The figures are another blow for the embattled property sector, which has been hit by strict coronavirus lockdowns and a liquidity crisis among developers. Under pressure to halt an economic slowdown, Chinese authorities stepped up efforts in May to salvage the residential market by urging banks to lend more, lower mortgage costs and ease rules on owning multiple properties.
The real estate industry’s debt woes have spread to stronger enterprises as slower sales hurt cash inflow. State-backed Greenland Holdings Corp. last week shocked investors by seeking to delay repayment on a dollar bond, spurring a broader sell-off among higher-rated companies like Country Garden Holdings Co.