China’s property slump is easing, but the relief will be short-lived

The love-hate relationship goes on. For almost two years China’s leaders cracked down on borrowing to build and bet on property, plunging the market into a crisis. Now that the has been weakened by the failures of the policy, the government is racing to rescue real estate. Ni Hong, China’s housing minister, has said his ambition this year is to restore confidence; a series of measures announced in the past few months seek to make it easier for developers to raise capital. These efforts are reviving the property market. Unfortunately, they leave it just as vulnerable to boom and bust as ever.The downturn of 2022 was the most severe in recent memory. Sales of floor space plunged more sharply than ever before. Property investment fell for the first time since records began in 1999. Funds raised by developers fell by a quarter. For the past 15 years house prices in China mainly went up. They have spent the past six months sagging like a termite-weakened floor.