China’s property crisis is back in global headlines for all the wrong reasons as Asia’s biggest economy goes wobbly.
The nation’s property boom was among the engines that turned China into an international powerhouse. Now, a years-long housing downturn is presenting Xi Jinping with arguably the biggest challenge of his decade-plus as Chinese leader.
Data for May show that government stimulus efforts to date aren’t gaining the traction Xi’s inner circle had hoped. New homes sales fell roughly 4% last month year on year after a 3% decline in April. It’s the worst run for the sector in nearly 10 years. Property investment is down 10% since the start of the year compared to the January-May period a year ago.
“This data further indicates that the property sector will remain a headwind on growth this year,” says Lynn Song, chief Greater China economist at ING Bank, adding that they should “ring some alarm bells” in Beijing.