BEIJING: China’s new home prices fell at the fastest monthly pace in a year in October, official data showed on Friday, highlighting persistently weak demand in the crisis-hit property sector and reinforcing the need for further policy support.
Prices fell 0.5% month-on-month, the steepest decline since October last year, after a 0.4% drop in September, according to Reuters calculations based on data released by the National Bureau of Statistics.
On an annual basis, home prices fell 2.2% in October, matching the rate of decline from the previous month.
The continued declines in home prices, especially in September and October, traditionally a peak sales season, highlight the challenges Beijing faces as it seeks to help the sector find its footing amid growth headwinds.
Since the 2021 market turmoil, the sector has struggled with sluggish sales and liquidity constraints.
Stabilising the market could boost household consumption and help reduce the economy’s over-reliance on government-led infrastructure investment as well as exports, which have been hurt by U.S. President Donald Trump’s trade policies.
While authorities rolled out a series of key measures in the second half of 2024 to support the market, large-scale new stimulus has been withheld this year. Recent policy steps have mainly reaffirmed existing commitments.
The market faces multiple challenges such as shrinking population in third-tier cities, a large volume of listings in the resale market and persistently weak buyer confidence, said Zhang Dawei, an analyst at Centaline. He urged further easing of mortgage policies to help stabilise sentiment.
After cutting mortgage costs for some buyers in the first half of 2025, policymakers mainly reiterated pledges for stabilising the market.
A survey conducted by the China Index Academy across over 260 cities showed a particular decline in home-purchasing confidence in smaller cities, dropping by 2.9 percentage points month-on-month.
The resale home market remains especially weak, with both year-on-year and month-on-month home prices declining in 70 cities surveyed, official data showed.
“The month-on-month drop in second-hand home prices is nearing a critical threshold,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
“If this decline continues, following the 2024 pattern of swift policy response, government intervention becomes highly likely.”
Separate official data showed continued declines in property investment and home sales by floor area in the first 10 months.
The government’s policy recommendations for the country’s 2026-2030 development plan prioritised “high-quality” development of the real estate sector, with a focus on improving housing supply to meet people’s different needs.
The recommendations also highlighted improving the system for the development, financing and sales of housing as well as resolving risks in the property market.
