China is expected to announce new measures to fix its property crisis, spur growth

China’s housing prices plunged in the first four months of the year, although factory output rose nearly 7%, according to data released Friday, as the country prepares to announce new measures to revitalize its ailing real estate industry.

Officials at the National Statistics Office acknowledged that domestic demand (consumer and business spending) remained “insufficient” and said the government was considering new ways to revitalize the property industry after house prices They sank 9.8% in January-April compared to the previous year.

Liu Aihua, spokesperson for the office, said that in accordance with the policies set by the Communist Party leadership, it was necessary to find ways to balance supply and demand, meet public expectations for high-quality housing and “seize the opportunity to build a new high-quality development model for the real estate sector.”

The State Council, China’s Cabinet, said it would hold a news conference later on Friday focused on the real estate industry.

China’s property market has slumped after a crackdown on excessive debt by property developers several years ago, dragging down a wide range of other businesses and slowing growth in the world’s second-largest economy.

Dozens of property developers, whose legions of high-rise apartments have transformed cityscapes across China, have defaulted on their debts.

The government has reduced interest rates and released billions of dollars of financing to help financially struggling developers deliver homes already promised and paid for.

Some local governments are snapping up apartments that aren’t selling because of weak demand, with plans to rent them out as affordable housing in trial programs that may become national policy.

Financial news outlet Caixin reported that the Housing Ministry, the central bank, other government agencies and state banks were creating a joint working group to brainstorm ways to revitalize the industry.

China’s economy grew at a solid 5.3% rate in the first quarter of this year, but that is relatively slow for a developing economy, and signs of weakness have persisted.

Friday’s report from the National Statistics Office showed that factory output rose 6.7% in April from a year earlier and investment in fixed assets, such as factory equipment, rose 4.2%.

But housing construction starts fell almost 25% year-on-year and sales measured by surface area fell 20%. Financing for real estate projects fell by 25%.

Retail sales rose just 2.3% in April.

Officials said they expected demand to recover as the government implements policies aimed at getting households to sell old cars and appliances and buy new ones.

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Associated Press researchers Yu Bing and Wanqing Chen in Beijing contributed to this report.