Prices for new homes in 23 out of 70 large and medium-sized Chinese cities saw a month-on-month drop in February, compared with 15 in January, the National Bureau of Statistics (NBS) said. As for pre-owned homes, a month-on-month decline in prices was seen in 27 cities, while 14 cities saw growth, most of which was negligible. Beijing prices dropped 0.2%, Guangzhou fell 0.1%, while prices in Shanghai and Shenzhen increased 0.2% and 0.5% respectively. With offline sales offices closed and potential buyers secluded at home, the area of housing sold nationwide decreased 39% year-on-year during the January-February period, while the sales value dropped 35.9%. Many cities, including Wuhan, Hubei province – the epicenter of the coronavirus outbreak – reported zero transactions in February. The outbreak has had a significant influence on the real estate sector due to its dampening of outdoor activities, transportation, consumption, face-to-face commerce, and services.

Li Naichao, Director of the Beijing Residential Real Estate Chamber of Commerce, said most residential complexes have been asking for entrance permits from visitors to control the spread of the virus. This prevented agents and clients from freely seeing apartments with their own eyes. In addition, individual incomes were also affected due to the epidemic, which made clients more cautious regarding major spending decisions, Li said. Slumping transaction prices also shook the confidence of sellers. Newly-released homes on property trading platform Homelink declined 57.7% in the first two months of 2020 compared with 2019. In addition, investment, new projects and land purchases all decreased significantly. Real estate investment was about CNY1.01 trillion in January and February, down 16.3% year-on-year. The area of newly constructed residential buildings declined 44.4% to 75.59 million square meters, and the land purchase area dropped 29.3% to 10.92 million sq m, the NBS said.

Xie Chen, Director of Research at property services firm CBRE China, said that with the decline of sales and the upcoming peak for debt maturity, property developers have accelerated domestic and overseas financing. Related bonds issued in January and February reached about CNY250 billion, the highest in history during the period. China Vanke’s sales dropped 35.1% in February. With the resumption of operations postponed, delivery of some 10,000 residential units in the first quarter was delayed. Sunac China reported an over 30% decline in sales in February. Country Garden announced a more than 49% drop in sales that month. The sales area of Longfor reached 434,000 sq m in February, down over 35% year-on-year, while its sales figure declined 29.9% to CNY7 billion. Over 100 real estate companies went bankrupt from early 2020.

Some property developers boosted their online presence. Evergrande pushed its ads on multiple media outlets – “the biggest ever discount in history: 25%” – in the second half of February. The discount remained at 22% in March. Thanks to the promotion, sales of Evergrande reached about CNY44.73 billion in February, up 108% year-on-year. Live-streaming was also widely used. China Real Estate Information Corp said 143 out of the top 200 property operators initiated “cloud purchasing” services – online consulting, transactions and virtual reality-backed inspections, the China Daily reports.

Despite the challenges, experts believe the impact of Covid-19 on the property sector will be controllable and only short-term, due to sustained strong demand from Chinese consumers. “The sales rebound afterward is very likely to offset the impact,” said Hou Yunchun, former Deputy Director of the Development Research Center under the State Council. Online transactions grew 40% in the first half of March month-on-month, though they’re still 20% less than in 2019, said real estate agency Centaline Property.