BEIJING — New data show China’s massive property sector is still struggling to turn around, despite signs of recovery earlier this year.

“In a reversal from April, prices accelerated in the housing market but sales slowed,” the U.S.-based China Beige Book said in its report for May, released Tuesday. That’s based on the research firm’s survey of 1,085 businesses conducted from May 18 to 25.

“In commercial property, both pricing and transactions weakened sharply,” the report said. “Poor results in construction and reduced fiscal activity sent copper producers’ May earnings and production into contraction.”

Beijing has eased its pressure on real estate developers in the last year, following a crackdown on their debt levels in August 2020. The property sector and related industries have accounted for more than a quarter of China’s economy, according to Moody’s estimates.

New home sales for the week ended May 28 grew by 11.8% from a year ago, a sharp slowdown from 24.8% growth a week earlier, pointed out Nomura’s chief China economist Ting Lu in a report Monday. That’s based on seven-day moving average data from Wind Information.

Both weeks’ sales volume was lower than during the same period in 2019, prior to the pandemic, the report said.

Most of the sales decline stemmed from China’s largest cities, the report said. Those so-called tier-1 cities have been a bright spot since people tend to move to urban centers for jobs.

Investors in Chinese property developers are also getting more skeptical about the market.

The Markit iBoxx index for China high-yield real estate bonds is back down to near where it was trading in November, when Beijing announced support for the sector through a “16-point plan.”

While that plan “has been instrumental to setting a floor to this crisis,” the initiatives are only aimed at supporting developers’ debts at a project level, S&P Global Ratings analysts said in a May 22 report.

That means there’s still uncertainty about whether developers can repay investors for bonds at a holding company level, the ratings agency said. They’re looking at whether the developers can generate enough cash from property sales.

In April, the analysts pointed out that national property sales fell to 900 billion yuan ($126.87 billion), below last year’s monthly average of 1.1 trillion yuan.

For all of 2023, S&P expects China developer sales to fall by about 3% to 5% — slightly better than the previously forecast 5% to 8% drop.

This year’s forecasts are based on expectations that sales in larger cities grow by about 3%, while sales in smaller cities don’t drop by more than 10%, the report said.

In the secondary-home market, business activity “has been cooling since April, with a fall in the number of listed-for-sale homes, lower asking prices and fewer transactions,” Fitch Ratings said in a release Monday.

“This slowdown follows a strong rebound in 1Q23, suggesting homebuyer confidence remains fragile amid an uncertain economic outlook and weak employment prospect[s].”

New homes in China are typically sold before developers finish building the apartments.

“Secondary-home market sentiment can be viewed generally as a barometer of the property sector, as pricing and supply are not subject to regulators’ intervention – unlike the new-home market,” the Fitch analysts said.

Secondary home sales also greatly influence prices for new homes, the analysts said, estimating more than half of homes sold in China’s largest cities fall into the secondary-home market.

The weak performance in May comes amid elevated market hopes for a recovery.

A quarterly survey by the People’s Bank of China had found an uptick in locals’ interest to buy a home in coming months — and greater expectations for higher property prices.

The real estate market is still in a “period of adjustment,” Liu Lijie, market analyst at Beike Research Institute, said in written commentary Tuesday translated by CNBC.

Government policy needs to improve market expectations for a real estate recovery, Liu said, noting that additional measures can be taken even in large cities to boost home buying.