China Home Sales Slump Drags On as Deflation Eats Into Incomes

China’s residential property sales continued to fall on in May, signaling the real estate slump is still weighing on an economy that’s under pressure from deflationand trade tensions.

The value of new-home sales from the 100 largest property companies slid 8.6% from a year earlier to 294.6 billion yuan ($40.9 billion), according to calculations based on preliminary data from China Real Estate Information Corp. That follows an 8.7% decline in April.

A truce on US tariffs has done little for the world’s second-largest economy as falling prices erode corporate profits and employee incomes. That has led to suppressed ...