Beijing home resales hit five-year low

Cooldown in mainland China continues

Beijing skyline. HelloRF Zcool/Shutterstock

The volume of Beijing home resales will reach just 72,000 units in the first half of 2019, a new low for the past five years, according to Xinhua, citing data from real estate agency Centaline Property.

The projection is down six percent from H1 2018. However, 16,000 new homes will be traded in the first half of 2019, twice the volume recorded in the same period last year.

The cooldown in the Chinese residential property market became apparent as early as May. Resale home prices in the tier-one cities of Beijing, Shanghai, Shenzhen and Guangzhou inched up only 0.1 percent month-on-month, down 0.3 percentage points from April.

Property sales by floor area plummeted 5.5 per cent in the year to May, according to National Bureau of Statistics (NBS) data. This is the biggest decline since October 2017 when Reuters noted a sales drop of six percent. Sales had risen 1.3 percent annually in April.

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The annual property investment growth of 9.5 percent in May is also the slowest since December, according to Reuters.

The decelerating property sector is “concerning” to economists at ANZ. “We really need to keep an eye on its negative impact on growth,” it said in a statement.

The slowdown has been imputed to weak factory activity and producer price growth, compounded by a sluggish economy in general and Beijing’s trade skirmish with Washington DC.