BEIJING – China’s new home prices stopped falling month on month in December for the first time in 18 months, official data on Jan 17 showed, after the government rolled out multiple rounds of stimulus to lift the property sector from a prolonged slump.
That stood in contrast to a 0.1 per cent decrease in November, as calculated by Reuters based on data from China’s National Bureau of Statistics (NBS).
On an annual basis, new home prices fell 5.3 per cent following a 5.7 per cent drop in the preceding month.
Home sales have slumped in China since the property market was hit by a crisis in 2021.
Debt-laden developers have been struggling to repay borrowings and deliver pre-sold homes, dampening confidence in the sector.
Beijing rolled out measures in the second half of 2024 to stabilise the market, including cutting mortgage rates and allowing local governments to buy unsold homes and idle land with special bond proceeds.
These policies have contributed to stabilising real estate expectations, with some cities, especially first-tier ones, showing signs of recovery, said Mr Zhang Dawei, an analyst at property agency Centaline. However, he cautioned that the overall property market has not bottomed out yet.
Mr Zhang expected more supportive policies to come in March, possibly including further reductions in mortgage rates, easing of home-buying restrictions and cuts in transaction taxes and fees.
Risks in the real estate market have been significantly mitigated, the country’s central bank governor said on Jan 13. That view was supported by the steady month-on-month prices and price increases in first-tier cities in December.
Out of the 70 cities surveyed by the NBS, 23 saw a rise in prices, six more than in the previous month.
Nevertheless, despite the government’s efforts to strengthen the sector through various means, the fundamental problems facing most developers have hardly eased in the past three years.
“The property sector is still under pressure and the authorities don’t want to see a return to the old days of leverage and big price rises, so investors still need to be patient,” said Mr Ben Bennett, Asia-Pacific investment strategist at Legal And General Investment Management.
Additional property-related data released on Jan 17 indicated continuing sluggishness in the supply side. Property investment in 2024 fell 10.6 per cent from the previous year, marking the largest annual decline on record, according to separate official data.
Property sales and new construction starts, measured by floor area, fell 12.9 per cent and 23 per cent respectively in 2024, signalling persistent challenges for the sector in the foreseeable future. REUTERS
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