China's Property Crisis Deepens, Urgent Policy Measures Needed

China's real estate troubles are worsening as weak new home sales and the looming default of property developer Country Garden intensify calls for bolder policy support. New home sales for the top 100 developers dropped by about a third in June and July, leading to significant cash flow issues for developers. The debt troubles in the Chinese property sector, along with the uncertainty of government support, are adding to the broader unease in the housing market. State-owned developers are better positioned to grow amid the credit malaise, while non-state developers are facing leverage problems. However, underlying housing demand in first-tier cities remains resilient and may be unleashed with greater policy clarity.