China’s real estate investment fell 9.3% year-on-year in October before the decline widened | Commercial housing sales | Real estate development investment

[The Epoch Times, November 15, 2023](Comprehensive report by Epoch Times reporter Chen Ting) On Wednesday (November 15), official data released by the Chinese Communist Party showed that China’s real estate sales accelerated its decline in October, and real estate investment continued to decline. This shows that Although Beijing has recently stepped up its support efforts, the real estate industry is still not out of the woods.

Reuters calculated based on data released by the Statistics Bureau of the Communist Party of China that the sales area of ​​commercial housing fell by 20.33% year-on-year in October, and the decline in September was 19.77%.

At the same time, China’s real estate development investment fell by 9.3% year-on-year in the first 10 months, a decline that expanded by 0.2 percentage points from the previous nine months.

Real estate investment fell 16.7% in October from a year earlier, after falling 18.7% in September, according to Reuters calculations.

In addition, in the first 10 months of this year, the area of ​​newly started housing construction also dropped by 23.2% year-on-year, and the area of ​​newly started residential construction dropped by 23.6% compared with last year.

Over the past few months, the Chinese authorities have implemented measures to strengthen the real estate industry, including easing restrictions on home purchases and reducing borrowing costs. However, these measures have been unable to bring about a significant recovery in the housing market.

Beijing remains concerned that risks could spread to other industries and threaten financial stability.

“Obviously, the real estate industry remains a weak link in the economy and will require further support in the foreseeable future,” Zhou Hao, chief economist at Guotai Junan International, told Bloomberg.

On Tuesday, Bloomberg reported that China plans to provide 1 trillion yuan (about 137 billion U.S. dollars) in low-cost financing for urban village renovation and affordable housing projects, citing people familiar with the matter. Economists are discussing the potential impact of the plan.

Some economists believe that although the People’s Bank of China previously used collateralized supplementary loans (PSL) for so-called “shanty town renovation” programs between 2014 and 2019. However, urban village renovation may not have the same impact as “shanty town renovation” because new projects are mainly concentrated in China’s big cities.

Jacqueline Rong, deputy chief economist for China at BNP Paribas SA, said these large cities account for a smaller share of the overall real estate market compared with smaller cities where shantytown plans are located. The share is much smaller.

She believes urban village plans may be more difficult to implement and take longer to complete.

“The biggest obstacle to real estate recovery is the large number of pre-sold but unfinished houses in lower-tier cities,” Lu Ting, chief economist at Nomura Securities China, wrote in a report on Wednesday.

“We believe Beijing will ultimately need to use its own money, using banknotes printed by the People’s Bank of China (such as PSL), to fill the huge funding gap and ensure the delivery of pre-sold homes,” the report reads.

Editor in charge: Li Muen#