(Corrects to about 20 months in the third paragraph, not 23 months)
BEIJING (Reuters) -The stock of new homes in small Chinese cities hit its highest since 2019 as of the end of August, according to a report from an independent consultancy, amid fragile demand in the country’s downtrodden property market.
The number of unsold new homes in tier-three and tier-four cities jumped 5% as of the end of August from a year ago, according to China Real Estate Information Corp (CRIC) which monitors 100 Chinese cities.
It was currently taking developers about 20 months to sell a new home nationwide and over 50 months in some small cities, CRIC said in a report published on Wednesday.
Small cities generally account for about half of all unsold new homes in China. CRIC declined to comment when asked by Reuters to give more details.
China’s property market has repeatedly grappled with crises since 2020 and problems worsened in August as a mortgage boycott and developers’ financial strains further hurt confidence in the sector, data showed earlier this month.
Prices were dragged down by weak demand in smaller cities amid persistently slow deliveries by heavily-indebted developers, the data showed.
Developers in tier-two cities including some provincial capitals, were also struggling to find buyers, the CRIC report showed, and it was taking them around 18 months to sell houses.
The eastern city of Qingdao and the central city of Wuhan both reported more than 20 million square meters of unsold new home stock each, topping the cities monitored by CRIC.
While the number of unsold new homes increased by 13% year on-year in August in tier-one cities, where developers tend to launch new projects, it took nearly 13 months for new homes to be sold in cities such as Beijing, Shanghai, Guangzhou and Shenzhen, said CRIC.
Nationwide, housing stock rose 3% to 587.2 million square metres, according to CRIC. That’s the equivalent of about 6.5 million typical Chinese homes measuring 90 square metres each.
Housing stock has been rising at least since mid-2020 when policymakers started to step in to cut excessive debt held by developers.
As of August, there were 6.1 billion square metres of housing projects under construction, according to data from China’s statistics bureau.
The market will continue to find its bottom, with home sales likely to fall in the traditional peak buying season of September, said the CRIC.
“Overall inventories are likely to maintain a rising trend,” it said.
(Reporting by Liangping Gao and Ryan Woo; Editing by Ana Nicolaci da Costa)