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China’s Hope to Rescue the Housing Market Burst

An Epoch Times article listed five points that suggest that China’s dream to rescue its real estate industry is only an illusion:

  1. The funding for real estate development keeps sliding. According to China’s National Bureau of Statistics, investment in the real estate industry was 13.289 trillion Yuan (US$1.85 trillion) in 2022, 10 percent down from a year ago. Investment in the period of January to May this year was 45.7 trillion yuan, down 7.2 percent from the same period last year. More and more people are selling their homes. Shanghai has an inventory of 200,000 pre-owned homes for sale. It sold 16,000 homes in May, which was  one-third lower than the sales volume in March.  In May, over 100 cities saw the largest price drop  since 2022.
  2. There has been a big jump in the number of foreclosed homes. There were 606,000 foreclosed homes in 2022, but only 118,000 were sold.
  3. The “Guaranteed Delivery” effort did not work. Due to a lack of funding, China put in 500 billion Yuan in July 2022 to help real estate builders to complete their pending housing construction projects . A year has passed. South China and the south China regions completed 56 percent and 46 percent of their housing projects, respectively. Southwest China and the central China regions completed only 15 percent and 16 percent.
  4. Real estate companies are struggling. The total profits of 69 publicly-traded real estate companies dropped in 2021. In 2022, the proceeds even became negative. More than 20 companies have been suspended from trading (they even face the risk of being delisted).
  5. Seven companies had been traded below 1 yuan for over 20 days and thus are likely to be delisted.

Source: Epoch Times, June 19, 2023