A slowdown in home construction is a big drag on China’s economy, with GDP growth down to a six-year low of 7%. The government is struggling to arrest the slide.
A barrage of stimulus measures this year, including five interest-rate cuts since November and relaxed house-purchasing rules, have boosted sales in recent months.
However government stimulus is failing to offset the overhang of inventory from previous years. The backlog is so bloated, particularly in China’s third- and fourth-tier cities, that property developers are largely unwilling to acquire land and start new projects.
Rate cuts have been less effective than usual due to the property...