New Delhi

The average daily home sales in China plummeted by 47 per cent during the May Day public holiday compared to the previous year.

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According to data cited by Reuters from the China Index Academy, it was revealed that home sales in 19 out of 22 surveyed cities witnessed a sharp decline during the five-day holiday period.

Mega-cities like Guangzhou and Shanghai experienced a steep decline of over 60 per cent.

The slump in home sales is a reflection of bigger challenges in China's real estate sector, worsened by ongoing policy adjustments and economic uncertainties.

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Although there have been efforts by Chinese authorities to strengthen the housing market, analysts argue that many policies lack long-term effectiveness and fail to address fundamental issues.

At a recent politburo meeting, policymakers highlighted the need for improved policies to address housing inventory, noting persistent pressures within the housing market.

Recognising the need for decisive action, analysts and industry experts have advocated for a comprehensive approach to stimulate home sales and stabilise the real estate sector.

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Suggestions include reducing the down payment ratio, lowering mortgage interest rates, and revising transaction taxes and fees to incentivise home buyers.

Additionally, local governments have implemented measures such as easing home purchase restrictions and optimising regulations to facilitate home transactions.

Responding to the downturn, cities like Chengdu and Beijing have implemented localised measures to alleviate pressure on the housing market.

Chengdu recently relaxed home purchase limits, while Beijing announced "optimised measures" to facilitate new home purchases in outer districts, aimed at revitalising home sales.

Analysts anticipate further policy easing measures and increased intervention by local governments to stimulate housing demand and absorb excess housing inventory.

(With inputs from Reuters)