China's early 2023 property investment drop eases with 9% decline

China's property market has shown signs of slower declines in investment and sales at the start of 2024, as government measures aim to mitigate the downturn experienced in the sector. Property investment decreased by 9.0% year-on-year in January and February, an improvement from the 24.0% fall seen in December 2023. Similarly, property sales by floor area contracted by 20.5% compared to the same period last year, less than the 23.0% drop recorded in December.

To support the property market, the Chinese authorities have introduced a "whitelist" mechanism that channels funds from state banks into selected local property projects. Despite these initiatives, the sector faces challenges with new construction starts by floor area falling 29.7% year-on-year, after an 11.56% decline in December 2023. Market sentiment remains cautious due to the ongoing adjustments in the real estate market.