China's property market struggles, regulatory measures introduced
Beijing's National Bureau of Statistics (NBS) states that Chinese home prices shrank by 1.6% in their sharpest decline since August as demand on houses falls back and property developers encounter cash issues.
As the real estate market in China is battling a severe debt crisis, and amid a slowing economy overall, new data has revealed that prices of new homes in the country witnessed their steepest downfall in October in nearly 7 years.
According to Beijing's National Bureau of Statistics (NBS), prices shrank by 1.6% during the same period last year, marking their sharpest decrease since August 2015.
The Bureau noted that property prices saw a decline in 58 cities, impacting the average selling price in 70 Chinese cities.
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The NBS however highlighted that prices in Beijing and Shanghai did not fall back despite the heavy pressure, which can be mostly attributed to measures taken earlier last week by China's Banking Regulatory Commission to save the real estate sector.
The Covid pandemic created market uncertainties in China, which in its turn affected the demand for new homes that resulted in mega-real estate and construction companies struggling due to financial setbacks, a sector that claims a quarter of China's GDP.
The introduced measures include offering credit to housing developers burdened with debt, financial payments to ensure project completion in addition to granting loans to home buys with different installments.