By Liangping Gao and Clare Jim

BEIJING/HONG KONG (Reuters) – China’s property sales in April fell at their fastest pace in at least 12 years as COVID-19 lockdowns further dampened demand despite further policy easing measures aimed at revive a key pillar of the world’s second largest economy.

House sales in value in April fell 46.6% from a year earlier, the biggest drop since at least 2010, and widening sharply from the 26.17% plunge in March, according to Reuters calculations based on data from the National Bureau of Statistics (NBS) released on Monday.

January-April property sales in value fell 29.5% year-on-year, compared to a 22.7% drop in the first three months.

A further cut in mortgage interest rates for some homebuyers announced by Chinese authorities on Sunday left investors and analysts little convinced that it could revive sluggish real estate demand.

The sector, a major driver of economic growth, has been in a severe recession since last year after authorities clamped down on excessive borrowing by developers, scaring off many potential buyers who feared projects would not be completed.

More than 80 cities have taken steps to boost demand since the start of the year, including grants, mortgage rate cuts and smaller down payments.

However, the property outlook remained bleak amid prolonged COVID-19 restrictions in dozens of cities, including Shanghai, now in its seventh week of lockdown.

“With no reopening in sight, a slight drop in the lower bound for mortgage rates provides little support to potential first-time home buyers,” said Nomura’s chief China economist, Ting Lu.

“While we expect this reduction to provide a benefit, the positive impact may be quite limited as strict anti-COVID measures look set to continue for an indefinite period,” Lu said in a note on Monday.

He added that the uncertainty, lack of confidence, rising unemployment rate and declining income growth have all contributed to the slump in new home sales.

Hong Kong’s mainland Hang Seng property index rose 1.2% late in the morning, compared with a 3.35% gain at the open. The broader market fell 0.2%.

National real estate investment by developers fell 2.7% from a year earlier in January-April, after gaining 0.7% in the first three months of the year.

In April, real estate investment fell 10.1% year on year, the fastest pace since December, compared to a 2.4% drop in March.

New construction starts as measured by floor area plunged 44.19% from a year earlier, the fastest pace since January-February 2020.

New construction starts fell 26.3% in January-April from a year earlier, after falling 17.5% in the first quarter of the year.

Real estate developers, hoping the market will bottom out in the second quarter, are revising investors’ expectations for full-year sales down after a 50% plunge in the first four months.

“Sales recovery is essential for liquidity, without which policy effects will be discounted,” Citi said in a statement. “More ‘real’ action before a permanent loss of demand is needed for a faster recovery.”

Japanese construction equipment maker Komatsu reported a 16.6% drop in the use of its machines in China in April, continuing a 17.3% decline in March.

(Editing by Jacqueline Wong and Christopher Cushing)