Home sales in China fell in July, exposing a fragile market

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housing market in china recorded a sharp drop in home sales throughout July as underlying economic problems become more apparent.

July sales fell 39.7% year-over-year, down about $77.6 billion, or 523.14 billion yuan. In total, there was a 28.6% drop from June to July, ending a two-month rally.

Apartment sales up in May and June compared to previous months, but according to The Wall Street Journal, July largely offset that growth.

“China’s economy has been slowing down for quite some time,” Craig Singleton, a fellow at the non-partisan Foundation for the Defense of Democracy, told Fox News Digital earlier. “What we are seeing right now is a rapid slowdown in economic growth.”

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Singleton argues that while COVID-19 played a role in the initial problems, Slowdown in China’s Recovery emerged as a result of “deeper structural, systemic problems”.

Aerial photograph taken in February.  February 16, 2022 showing the construction site of NYU's new NYU Shanghai campus in Shanghai in east China.  Construction took place in the very center of the sprawling urban landscape.

Aerial photograph taken in February. February 16, 2022 showing the construction site of NYU’s new NYU Shanghai campus in Shanghai in east China. Construction took place in the very center of the sprawling urban landscape.
(Fang Zhe/Xinhua via Getty Images)

“One of them, by some conservative estimates, is the hyper-lending real estate market in China,” he explained. “China’s real estate sector accounts for 30% of Chinese GDP, so even small deviations in this market could have a huge impact on China’s broader global domestic product and broader growth.”

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Chinese real estate market. there was a sales boom driven by debt-financed building projects that sold homes before they were built. The lack of completed projects sparked protests from angry potential homebuyers who refused to pay their mortgages.

FILE PHOTO: Apartments under construction are pictured from a building at sunset in Shekou District in Shenzhen, Guangdong province, China, 7 November 2021.

FILE PHOTO: Apartments under construction are pictured from a building at sunset in Shekou District in Shenzhen, Guangdong province, China, 7 November 2021.
(Reuters/David Kirton)

Hundreds of buyers from about 320 projects across the country as of July 29 refused to pay their mortgages. Instead, these potential buyers have turned to buying second-hand houses or newly built public houses, which can cost less.

Even cuts in interest rates and down payments or outright offerings of cash subsidies have not generated enough activity to support a sagging housing market. Local authorities are considering the possibility of providing full assistance to needy developers.

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“The sector will not stabilize unless the real estate developer liquidity crisis is resolved,” said Song Hongwei, director of research at the Tongse Research Institute.