News Karnataka
Thursday, May 19 2022

China housing market slumps as another developer in distress

New Delhi: Chinas giant housing market continued to decline in the past month with another major developer showing signs of financial distress, as state-owned enterprises began carving up the carcass of the failing property giant Evergrande, The Guardian reported.

House prices, sales, investment and construction data released on Wednesday showed renewed signs of crisis in the market, which accounts up to 30 per cent of the country’s output and which appears certain to drag on the world’s second biggest economy, the report said.

It comes a day after shares in one of China’s largest developers, Shimao Group, fell 20 per cent on concerns that it was offloading assets to manage its spiralling debts.

“Cities of all classes are under pressure,” said Yan Yuejin, Director of Shanghai-based E-house China Research and Development Institution, adding: “The current scale of market supply is large and the demand is weak. The key is to accelerate inventory de-stocking to stabilise home prices.”

However, more data released on Wednesday showed that weak demand for houses was in line with other metrics across the whole Chinese economy, the report added.

Real retail sales increased by just 0.5 per cent on an annual basis – down from 1.9 per cent in October – to give the weakest outcome since August 2020, and far below the pre-Covid levels as consumers remained cautious and Covid outbreaks continued to cause snap lockdowns, the report said.

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