China’s new house sales by floor area dropped 37.7% from a year ago during the National Day break as the Chinese Communist Party’s stringent COVID restrictions weakened demand. 

Reuters cited data from the China Index Academy, showing that new house sales by floor area in China’s four major cities plummeted compared with last year’s holiday season.

Property sales in Beijing fell 64%, Shenzhen was down 49%, while in Shanghai, sales dropped 47%. 

Hangzhou faced the sharpest decline at 80%, greater than all the cities tracked in the index.

As China faces the ongoing property crisis, authorities are trying to ease the problem by unveiling multiple measures. 

Last week, Bloomberg reported that China’s central bank and its banking and insurance watchdog told six state-owned lenders to provide over $84 billion (600 billion yuan) in real estate funding.

In August, Chinese authorities reportedly planned to provide real estate developers with special loans worth $29 billion (200 billion yuan) to ease their troubles.

China’s central bank has lowered the interest rate twice to support homebuyers.

As reported by Reuters, analysts at ANZ said in a research note, “Property sales during the National Day holiday are the first test of policy effectiveness.”

Chen Wenjing, an analyst from a property research firm, told Reuters, “Homebuyers are still in a wait-and-see mood in the near term, and stimulus measures will take time to take effect.” However, experts shared their dim outlook on China’s property market. A survey from Montreal-based research firm BCA Research showed that more than 60% of respondents held a negative view of the country’s property market. They also agreed that the real estate crisis would not end in the next six months.

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