The real estate market in China is still mired in a quagmire as the economy is in jeopardy.
A spokesman for China’s National Bureau of Statistics said there had been some positive changes in the real estate market in recent surveys. However, the latest data shows that the property market is still in a severe winter and has not picked up.
The statistics bureau announced on June 17 that the country’s investment in real estate development was 5,213.4 billion yuan (776 billion dollars), a year-on-year decrease of 4.0%. In addition, residential investment was 3,952.1 billion yuan (588 billion dollars), down 3.0%.
From January to May, the construction area of houses was 8,315.3 million square meters, a year-on-year decrease of 1.0%.
The residential construction area was 5,869.2 million square meters, down 1.1%. The new construction area of houses was 516.3 million square meters, down 30.6%.
The newly started residential area was 377.8 million square meters, down 31.9%. The completed housing area was 233.6 million square meters, down 15.3%.
In the first five months, the commercial housing sales area was 507.4 million square meters, a year-on-year decrease of 23.6%.
Commercial housing sales were 4,833.7 billion yuan (720 billion dollars), down 31.5%.
Real estate development companies raised 6,040.4 billion yuan (899 billion dollars), a year-on-year decrease of 25.8%.
In May, the prosperity index of real estate development slipped to 95.6 from 95.88 in April. The index was below the 100-point mark for five consecutive months.
In terms of housing prices, data shows that the average cost of newly built
commercial housing was 9,527 yuan (1,418 dollars) per square meter in the first five months, a year-on-year decline of 10.3%.
In addition, real estate companies also face the second round of debt repayment peaks this year.
Caixin cited statistics from the Kerry Real Estate Research Center report that, from June to July, about 175.5 billion yuan (26.1 billion dollars) of domestic and foreign debt will be due from 200 core housing companies. That figure accounts for 61% of maturity in the year’s second half.
Domestic debt maturity accounts for more than 50%.
Private housing companies face higher debt repayment pressure. Their debt due in the past two months is about 117.8 billion yuan (17.5 billion dollars), accounting for 67% of the total scale.
Due to weak sales and difficulties in refinancing, most private housing companies are still experiencing tight funds and can only continue to seek domestic debt extension.
Many owners of the real estate businesses in Zhengzhou and Henan have encountered a shortage of funds.
On June 15, there were reports that the second phase of the “Sunac Zhongyuan Grand View” project in Henan had been suspended for several months. Previously, the project was supposed to deliver houses at the end of July and December this year.
The sluggish property market reflects the situation in China’s overall economy.
The May economic data found that China’s exports plunged 16.9% on the year, total retail sales of consumer goods dropped 6.7%, and manufacturing fell 4.6%.
In addition, the unemployment rate for young people between 16 and 24 was 18.4%, the highest since 2018.