Sectoral growth data in China showed that the recovery in the real estate sector was short-lived.
China’s real estate sector contracted again in the second quarter after a short period of expansion in the previous three months.
According to the breakdown of gross domestic product data released by the National Bureau of Statistics, the real estate sector decreased by 1.2 percent in the April-June period compared to the same period of the previous year.
In the first quarter, the industry saw growth for the first time since 2021. With the second quarter data, this growth turned into a contraction again.
The shrinkage in the real estate market adversely affected China’s economic recovery, putting Beijing’s official growth target of around 5 percent at risk. GDP figures released on Monday showed that growth lost momentum in the second quarter and deflation risks increased.
The National Bureau of Statistics said in a statement that hotels and consumer sectors such as dining, transportation and retail grew faster in the second quarter than in the previous three months, partly due to a lower base compared to last year.
The contraction in the real estate sector came after the latest data showing that real estate investments declined at a higher rate in the first half of the year, housing sales fell in June and housing prices fell for the first time this year.