What’s new: China’s property market has shown some “positive signs” and the impact on the financial system from volatility in the sector has been limited, People’s Bank of China Governor Pan Gongsheng said Monday.
The industry has a solid foundation for healthy and stable development over the long term, Pan said in a speech at the China Development Forum in Beijing, according to a statement the central bank posted on its website Monday evening. Pan also said that China’s financial system is operating soundly, and that financial institutions are generally healthy with relatively strong resistance to risks.
The background: Despite multiple rounds of supportive measures and soothing words from the country’s leadership, China’s property market has yet to show signs of a sustained recovery from a prolonged slump that started in mid-2021. The slump was partly triggered by a crackdown on leverage among real estate developers, who relied on borrowings to expand their business.
In the first two months of this year, sales of new homes fell 24.8% year-on-year by floor space and 32.7% by value, National Bureau of Statistics data show. Figures compiled by consultancy China Real Estate Information Corp. show that the value of sales by China’s top 100 property developers in the period almost halved compared with the same period last year.
Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Nerys Avery (nerysavery@caixin.com)
