The value of new-home sales from the 100 biggest real estate companies fell about 26.8 per cent from a year earlier to 251 billion yuan ($US35.4 billion), faster than the 19.7 per cent decline in July, according to preliminary data from China Real Estate Information Corp.
The Chinese property market is a major driver of steel demand. Iron ore is a key input to make steel, so the commodity’s price is heavily intertwined with steel demand.
Weakening housing demand in the Middle Kingdom has driven a $US40 per tonne fall in the iron ore price so far this year.
The accelerating slide shows the waning impact of the latest rescue package unveiled in May. At least 10 city governments have loosened or scrapped new-home price guidances to let market demand play a bigger role, a move that is expected to drive more real estate companies to cut prices.
The sector continues to be a drag on China’s economy, which needs more stimulus to meet the government’s 5 per cent growth target this year, according to Bloomberg Economics. The crisis has weighed on everything from the job market to consumption and household wealth over the past two years.
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