(Yicai) Jan. 25 -- The construction of new homes in China fell to the lowest level last year since 2007, mainly because of weak property market demand.

About 693 million square meters of new homes started construction last year, down 21 percent on the previous year and nearly 60 percent from a 2019 peak, according to data from the National Bureau of Statistics. The figure dropped 40 percent year on year in 2022.

Twenty years ago China's property sector was booming. Annual construction of new homes reached 788 million sqm in 2007, topped 1 billion sqm for 12 consecutive years from 2010, and peaked at 1.67 billion sqm in 2019. The decline in housing starts in recent years has mainly been the result of weak sales, with developers coming under greater financial pressure.

Property sales fell 6.5 percent to CNY11.7 trillion (USD1.6 trillion) last year, returning to the level of 2016 and tumbling more than 30 percent from a peak in 2021, according to the NBS, while investment in property development fell 9.6 percent to CNY11.1 trillion, back to the level of 2018.

China has rolled out policies to underpin the real estate market since the second half of last year, including lowering down payment ratios and mortgage rates, and most cities have lifted or eased property-buying restrictions. But the market outlook remains uncertain, according to analysts.

The pace of recovery will depend on whether homebuyers' expectations pick up, said Chen Wenjing, director of market research at the China Index Academy. Under neutral expectations, the annual sales area of commercial housing will decline by about 5 percent, she added.

If the economy recovers well, the willingness to purchase homes will be lifted, and if the transformation of urban villages progresses smoothly, the sales may increase a little, Chen pointed out.

Editors: Dou Shicong, Martin Kadiev