CHINA’S home sales rebounded in the first two months of the year as the government pledged policy support to help reverse the property slump that dented the country’s economic growth last year.

Official data yesterday showed much narrower declines in home sales, developer investment and construction starts in the January-February period.

Home sales by floor area fell 3.6% in the first two months of 2023 from a year earlier, according to data from the National Bureau of Statistics (NBS), versus a 24% decline for the whole of 2022.

The narrower sales decline followed a rise in new home prices in January, the first uptick in a year, as buyers, while still cautious, found solace in a slew of supportive policies, expectations of more stimulus steps and China’s optimization of its COVID response.

By value, home sales grew 3.5% year on year in the first two months of 2023, compared with a 28.3% drop in the full year of 2022.

Property investment by developers fell 5.7% in the January-February period, improving from a 12% slump in December and a 10% decline for the entire 2022.

Analysts expect property sales to be the first indicator to turn positive soon and see property investment rebounding in the second half of 2023.

“The figures are a good start to the recovery of the property market for 2023, and will further boost confidence,” said Yan Yuejin, analyst at the E-house China Research and Development Institution in Shanghai.

“Property sales figures are expected to turn from negative to positive in the first quarter of the year, the biggest sign that the property market is recovering.”

Sentiment for China’s property sector, for years a pillar of growth in the world’s second-biggest economy, has been hit hard by multiple factors since mid-2021.

The lifting of COVID-19 curbs and release of funds to developers for ensuring delivery of pre-sold projects will boost demand, said analyst Ma Hong at Zhixin Investment Research Institute.

“Investment by developers, a key indicator of market performance, will likely rise in the second half of the year, meaning not only an overall rebound, but also a substantial improvement in the operating conditions of real estate companies,” Ma said.

New construction starts measured by floor area fell 9.4% in the January-February period from a year earlier versus a 44% plunge in December and a 39% tumble for the whole of 2022. (SD-Agencies)