China's housing market showed signs of improvement at the start of the year, with property investment and sales declining at a slower pace,Reuters reported on Monday. Government interventions have helped mitigate the downturn, but analysts remain cautious about declaring an end to the slump. Property investment in China dropped by 9.0 per cent year-on-year in the first two months of 2024, an improvement from the 24.0 per cent decline in December 2023, according to National Bureau of Statistics data compiled by Reuters. Property sales by floor area also decreased by 20.5 per cent in January-February, compared to a 23.0 per cent fall in December. Despite these improvements, the Chinese real estate sector continues to face challenges, with home prices falling by 0.3 per cent month-on-month in February. The sector is still in a downtrend, and a slight slowdown in investment is unlikely to reverse this trend, said Hwabao Trust economist Nie Wen. To support the property market, China has implemented various measures, including a "whitelist" mechanism to channel funds into local projects and a reduction in benchmark mortgage rates. However, market participants remain cautious, with household loans decreasing in February and new construction starts plunging by 29.7 per cent year-on-year. HSBC economists emphasised the need for additional support for the property sector, suggesting that lifting home purchase restrictions and increasing public housing supply could help stabilise the market in the long run.
