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China Housing April 2023

China: Housing data is fairly soft in April

House prices in 70 large- and medium-sized cities increased 0.4% month on month in April, according to a weighted average index calculated by Refinitiv from data issued by the National Bureau of Statistics (NBS). The print followed March’s 0.5% increase. Meanwhile, house prices decreased 0.2% annually in April, up from March’s 0.8% decrease.

Other real estate data was downbeat: Year-on-year contractions in property investment and sales deepened in April relative to March, while credit data suggests that mortgage lending was feeble in April. As such, the property sector appeared to lose steam following an incipient recovery earlier this year. While the broad-based loosening of government restrictions on the sector has provided supported, real estate is still being weighed on by subdued consumer sentiment, population decline and households’ preference to prepay existing mortgages rather than obtain new ones.

On the outlook, Goldman Sachs analysts said:

“We expect more housing easing in the months ahead, but maintain our view that the property sector recovery should be gradual and bumpy, due to the challenging demographic trend, still-tight financing conditions for troubled developers and policymakers’ long-held stance that ‘housing is for living in, not for speculation’.”

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