China’s real estate market continues to struggle. The latest data shows that during the “May Day” holiday, the average daily sales of houses plummeted by 47% compared to the same period last year, with the resale market mirroring the trends seen in new home sales.
On May 6, data from the China Index Research Institute revealed that the average daily sales area of new houses in 22 representative cities during this year’s “May Day” holiday dropped nearly by half compared to the holiday period in 2023, and about 30% compared to 2019 before the outbreak of the pandemic.
Last year’s “May Day” holiday (April 29 to May 3) saw the average daily transaction area of new houses in the 22 cities at 157,000 square meters. This year’s “May Day” holiday (May 1 to May 5) saw that figure at 83,000 square meters, a decrease of 74,000 square meters or a sharp 47% decline.
Among the 22 cities, only first-tier city Beijing, second-tier city Jinan, and third-tier city Yueyang saw an increase year-on-year, while the other 19 cities experienced a decline.
First-tier cities Guangzhou and Shanghai plunged by 65% and 62%, respectively. Cities with declines exceeding 70% include second-tier cities Nanjing (74%), Qingdao (72%), and Wenzhou (70%).
Looking at the transaction data for second-hand houses during the “May Day” holiday, it followed a similar downward trend as new home sales, with overall transactions still on the decline.
According to data monitored by the Zhuge Research Center, during the “May Day” holiday, 12 key cities saw the sale of 2,123 newly constructed residential units, with an average of 425 units sold per day. This represents a total decrease of 52.12% compared to 2023 when 4,434 units were sold.
The research center pointed out that despite many places introducing favorable housing purchase incentives and relaxing purchase restrictions before the “May Day” holiday, the effects have not yet materialized when looking at the overall online signing data. With prices continuing to fall, listings remaining high, and current buyers still lacking confidence, the real estate market is still in a slow recovery phase, making it difficult to surpass last year’s sales momentum in the short term.
Furthermore, a report from Yi Han Intelligence showed that during the “May Day” period, the overall visitation level of a large central enterprise returned to the levels of weekends in March and April 2023, but the conversion rate was not ideal, leading to a drop of around 20% in transactions compared to the same period last year. Additionally, a privately-owned housing enterprise in South China experienced a 17% decline in subscription volume during the holiday period.
According to a report by First Financial of the mainland, analysts who have been closely monitoring the real estate market recalled that the performance of state-owned enterprises in the market during last year’s “May Day” holiday was relatively good, while this year witnessed declining sales across all types of enterprises.