Housing sales in China are slowing down as curbs on lending and concerns about developers’ financial health deter home buyers, casting a shadow over an industry central to the Chinese economy, reports The Wall Street Journal.
Over the last week, many large developers have reported lower sales figures for September, with several showing year-over-year declines of more than 20% or 30%. That is a stark drop-off for a month that leads up to China’s October 1 National Day holiday, whose promotions usually make this one of the strongest selling periods of the year. If sustained, the sharp downturn could have serious economic consequences.
Real estate has played an outsize role in China’s economy in recent years, compared with its importance in many other countries, and Chinese families have much of their wealth tied up in homes and in investment properties. Slower sales could spill over into investment and construction, potentially hurting growth, employment and local government finances. But discounting to spur sales could hurt home prices and hit household wealth.