Real estate investment in China fell by 10.2% y/y in January-July

Real estate investments in China fell by 10.2% in the first seven months of this year compared to the same period last year (more than 6 trillion yuan, $0.85 trillion). This was reported by Reuters with reference to the National Bureau of Statistics (NBS).

The decline occurred despite the fact that the government has taken a number of support measures to strengthen market sentiment.

Real estate sales by area in January-July 2024 fell by 18.6% year-on-year.

The volume of new construction by area in 7 months decreased by 23.2% y/y. The amount of funds raised by Chinese developers in the period decreased by 21.3% y/y.

The Chinese authorities are stepping up efforts to support the troubled real estate sector, including lowering the cost of buying a home and lowering mortgage rates. However, these measures are not yet enough to facilitate a significant recovery.

The outlook for China’s steel sector is not improving. The long-term downturn in the real estate market has destroyed the largest source of demand for the country’s steel industry, Bloomberg notes. Steel prices are falling and profits in the industry are declining. At the same time, the government is focused on reconfiguring the Chinese economy for the long term, and does not offer any relief for the sector. Beijing has offered neither a radical solution to the real estate problems nor a boom in infrastructure spending that could keep steel consumption at acceptable levels.