China’s primary home sales remained subdued and last week, new home sales in 47 major Chinese cities rose 2% from the prior week, indicating the year-on-year decline has narrowed slightly to 43%, compared to 44% in the previous week, said BofA Securities in a note on Monday.
In breakdown, new home sales in tier-one cities declined by only 1.6% from a year earlier, while that in tier-two and tier-three cities tumbled by 61% and 31%, respectively, it said.
So far this month, new home sales in the cities tumbled by 40% from the same period last year, expanding from the 24% drop in August, it said, noting that the faster decline was partly attributable to the impact of the Mid-Autumn Festival holiday.
In the long term, BofA Securities predicted that the Chinese government’s relaxation on home purchase restrictions will not be able to provide a significant boost to the housing demand amid the macroeconomic weakness, however the policy may shift more purchasing power from remote cities to major tier-2 cities, the bank said.