China's Property Market Struggles to Stabilize as Sales Plunge in November

Summary:

China’s real estate sector remains under severe stress, with November sales from top developers falling sharply. Analysts warn that the downturn is deepening, and a market bottom is not yet in sight....

Sharp Sales Decline Highlights Sector Fragility

China’s embattled real estate market is still in search of a floor, with November data pointing to a worsening slump. Industry figures revealed that the top 100 developers recorded a 36% year-on-year drop in property sales value. The magnitude of this decline illustrates the prolonged contraction in housing demand and reflects weakened buyer confidence, despite repeated policy support efforts.

Morgan Stanley further emphasized the severity of the downturn, estimating that average sales among 25 major developers declined by 42% compared to the same period last year. These figures suggest not just seasonal weakness but a deep-rooted structural deterioration that continues to weigh on the broader economy.

Analysts Sound Alarm Over Deteriorating Conditions

Hui Shan, chief China economist at Goldman Sachs, described the worsening property data as “real and concerning.” Her assessment underscores the causal relationship between persistent financial instability among developers, suppressed consumer sentiment, and delayed investment in residential property.

Despite multiple rounds of policy easing including interest rate cuts, relaxed home purchase restrictions, and liquidity support for developers the market has failed to respond in a meaningful way. The lack of recovery suggests that regulatory measures, while necessary, have yet to restore confidence or solve underlying imbalances in the housing sector.

A Market Bottom Remains Elusive

The continued slide in sales points to a protracted correction phase rather than a quick rebound. Key problems such as high developer debt, oversupply in lower-tier cities, and declining population growth compound the difficulty of restoring equilibrium in the sector. These issues contribute to a feedback loop of falling prices, eroded trust, and sluggish investment.

Without a visible turnaround in buyer sentiment or a breakthrough in developer financing, the market remains at risk of further decline. The downward trend in November sales extends a multi-year downturn that began in 2021, when policy tightening triggered the collapse of major property firms like Evergrande.

China’s property market, once a cornerstone of national economic growth, continues to contract under the weight of debt, oversupply, and policy fatigue. While stimulus efforts have provided temporary relief, the November data highlight a persistent lack of demand and entrenched investor pessimism. Until fundamental confidence is restored, the market is unlikely to find a firm bottom, posing continued headwinds to China's broader economic recovery.

Source: CNBC

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

Quick Access to 7x24

Quick Access to More Editor-selected Real-time News