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- Land sales and home prices showed some improvement in China's property market, Reuters reported.
- Government land sales rose for the first time in two years, while prices saw their fastest rise since mid-2021.
- But Evergrande's liquidation could dampen confidence for a while, Fitch Ratings wrote.
Real estate in China may finally be nearing the end of a yearslong slide, with home prices and land sales demonstrating fresh strength, Reuters reported.
Average city prices rose 0.15% month-on-month in January, marking the fastest gain since mid-2021. Growth occurred in 49 of the 100 surveyed cities, slightly more than the 47 cities that saw growth in December.
Government land sale revenue that month also notched a 1.8% gain from a year prior, the first time sales rose in 23 months, the outlet said.
Though this isn't yet a rebound, it signals that Chinese policies may finally be slowing the embattled sector's decline. While prices stabilize in some cities, demand has yet to return in others.
Beijing has had to take a more active role in the country's real estate as investment, construction, and prices all crumbled since 2022, caused by overbuilding and the sector's massive reliance on debt. At the end of last year, home values suffered their worst decline since 2015, while total sales tumbled 33.3% in January.
To counter this environment, authorities have looked to boost consumer spending and commercial investment, most recently by injecting fresh liquidity into the economy by lowering bank capital requirements.
But a late January court order for Evergrande, once China's largest developer, to liquidate may complicate any turnaround. According to Fitch Ratings, Hong Kong's liquidation order could become a lengthy ordeal, especially if mainland China does not recognize it.
"Homebuyers' confidence in private developers will therefore take an even longer time to recover, with market shares continuing to shift towards the state-owned counterparts," Fitch wrote. "This is despite the slew of measures announced by the government to boost private developers' funding access."
In the liquidation's immediate aftermath, Beijing released a fresh slate of measures to limit any fallout, such as lifting homebuying restrictions and offering $46 million in loans to state-backed developers.