(Yicai Global) Jan. 17 -- Sales of residential property in China tumbled more than 20 percent last year to a six-year low.

Home sales by value fell nearly 27 percent to CNY13.33 trillion (USD1.8 trillion) in 2022 from the prior year, lower than in 2017, while the area sold sank 24 percent to 1.358 billion square meters, less than in 2016, according to figures released by the National Bureau of Statistics today.

Weak sales have also dragged down investment confidence in the industry. Last year, investment in real estate development fell 10 percent to CNY13.29 trillion. Residential investment was CNY10.06 trillion, a fall of 9.5 percent.

This year, the financial authorities will continue to focus on improving the asset and liability situation of real estate companies. Zou Lan, director of the People's Bank of China’s monetary policy department, recently said that to prevent risks spreading from troubled developers to stronger ones in the sector, an action plan has been drafted to improve the cash flow of the more robust builders and guide their balance sheets to a safe range.

In a recent research report, Everbright Securities said that the stable and healthy development of the real estate industry is crucial for overall financial market stability and the economy. A number of government departments and commissions have shown their support for the industry, which has strongly boosted confidence.

But the measures will only start to take effect in the second quarter, assuming the peak of Covid-19 infections passes in the first, according to Li Yujia, chief researcher with the Guangdong Urban and Rural Planning Institute’s housing policy research center.

Given the weak property market and economic fundamentals, the market is likely to see just a modest recovery this year instead of a substantial rebound, especially in terms of house prices, Li said.

Editor: Tom Litting