(Yicai) Jan. 17 -- The Chinese real estate sector continued to decline last year, both in terms of sales and investment, but did so at a slower pace than the previous year, according to the latest official data.

China’s property sales volume fell 6.5 percent to CNY11.7 trillion (USD1.64 trillion) last year from the previous one, while the sales area dropped 8.5 percent to 1.1 billion square meters, data released today by the National Bureau of Statistics showed. The declines shrank 20 percentage points and 16 percentage points, respectively, from 2022.

Investment in real estate development in the country fell 9.6 percent to CNY11.1 trillion in 2023 from the year before, mainly because of sluggish sales and troubled financing, according to NBS data. Investment in residential housing plunged 9.3 percent to CNY8.4 trillion (USD1.18 trillion) in the period. The declines were slightly slower than in the previous year.

The total area of real estate properties completed in China last year jumped 17 percent to 998.3 million sqm, nearly 73 percent of which were residential houses, thanks to the Chinese government support, the NBS said.

Since last July, China has provided great policy support to the real estate market. The country cut the down payment percentage and mortgage interest rates to boost residents’ demand to buy houses and eased financing restrictions on real estate developers. Home purchase curbs have been eased in almost all Chinese cities, except the four first-tier cities and a few second-tier ones, according to real estate research institute CRIC Research Center.

There are still the foundations for the long-term sound development of the Chinese real estate market, NBS Director Kang Yi said at a press conference today. The country’s urbanization rate was 66 percent last year, more than 10 percentage points lower than in developed economies, he noted, adding that this will create a huge new demand for houses.

Many houses in China do not have complete functions and structures, so residents urgently need to improve their housing conditions, Kang pointed out. This will be another important driving force for the growth of the real estate market, he added.

After the Chinese real estate market shrank for two consecutive years, it returned to the same level as in 2015, Li Yujia, chief researcher at Guangdong Housing Policy Research Center, told Yicai. There is a slight possibility that the market will continue to decline, Li added.

Editors: Dou Shicong, Futura Costaglione