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New Year's Holiday Boosts China's Home Sales by 27.1%

During the three-day New Year holiday starting on December 31, Chinese new-home sales rose more than 20% year-on-year due to various factors such as promotions, support policies taking effect, and the release of pent-up demand following high COVID-19 cases.

Buildings in China
Buildings in China

The average daily floor area of homes sold in 22 cities selected by the China Index Academy increased by 27.1% compared to the previous holiday season.

China's Property Market Struggles Persist Despite New Year's Sales Increase

Despite the increase in home sales during the New Year holiday, China's property market crisis worsened in 2022. Official data shows that home prices, sales, and investment have decreased in recent months, adding further strain to the faltering economy. Policymakers have implemented various measures to support the industry and relieve the liquidity squeeze that has affected developers and delayed the completion of many housing projects, damaging buyers' confidence. For example, the ban on fundraising via equity offerings for listed property firms was lifted.

According to a real estate research firm, new-home prices in the 100 Chinese cities it monitors fell 0.02% year-on-year in 2022, marking the first decline since 2015. Home transactions also decreased nearly 40% year-on-year in 2021, the lowest level since 2015. The firm predicts that, for 2013, home sales may grow slightly under optimistic expectations. Still, under pessimistic expectations, the market adjustment trend could continue with new housing construction starts and investment facing downward pressure.