The real estate sector in China contracted again in the second quarter of 2023, after a short-term expansion in the first quarter, Invest-Gate reports.

The sector declined by 1.2% from April to June annually, according to the Gross Domestic Product (GDP) data released by the National Bureau of Statistics on July 18, 2023.

This contraction reverses the sector’s expansion for the first time since 2021, recorded in Q1. The recession in the real estate market weighed heavily on China’s economic recovery, where Beijing’s goal of achieving growth of around 5% is at risk.

The National Bureau of Statistics said on July 18, 2023, that consumption sectors, such as hotels, restaurants, transportation, and retail, expanded at a faster pace in Q2, partially due to the low comparison base on an annual basis.

After the disappointing GDP data, many Wall Street banks, including JPMorgan, Morgan Stanley, and Citigroup, have lowered their growth forecasts (for China).