China's property sector is under pressure as stocks enter a technical bear market, signalling investor doubts about government support, Bloomberg reported on Thursday. A Bloomberg Intelligence gauge tracking Chinese developer shares fell 3.3 per cent on Thursday, extending its decline from a mid-May high to nearly 21 per cent. Individual companies also incurred significant losses, with Sunac China Holdings Ltd. dropping 12 per cent and CIFI Holdings Group Co. sinking 8.4 per cent. The decline follows the unveiling of a broad support package by the central government on May 17th. Investors initially supported the package, but now its effectiveness is in doubt. Measures like lower down-payment requirements for homebuyers may not boost demand or address the oversupply of vacant properties. There are concerns about the government's intervention, with a central bank programme offering 500 billion yuan ($69 billion) in loans seen as inadequate given the large number of unoccupied apartments in China. Recent sales data shows slight improvement in the property sector, said Jeff Zhang, an analyst at Morningstar Inc. "We may need to wait until the end of year to see a narrowing of declines or a rise in monthly sales as a result of the government's rescue package," he added. Data from China Real Estate Information Corp. shows a slowdown in new home sales. Sales by the top 100 real estate companies fell by 33.6 per cent in May compared to the previous year, an improvement from April's 45 per cent decline. The slight month-on-month improvement offered a temporary boost to property shares earlier in the week, but long-term concerns have prompted investors to take profits.
