New home prices across mainland China in December registered the smallest month-on-month decline since June 2023, propelled by Beijing’s stimulus package.
However, it would be some time before the country’s significant property sector saw a strong recovery, because developers still had a large inventory to clear, analysts said.
Last month, prices of newly built homes in the mainland’s 70 major cities edged down 0.08 per cent from November, according to data released by the National Bureau of Statistics (NBS) on Friday. It was the first time in a year and a half that home prices in China stayed nearly unchanged, amid a property slump that wiped out an estimated US$18 trillion of Chinese household wealth since 2021.
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In the four top-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen – prices rose 0.2 per cent month on month.
“Reduced mortgage rates and lower thresholds for non-local residents to buy flats in the most developed cities fuelled homebuying interest,” said Zhu Xinhai, a sales manager with Shanghai-based 5i5j Real Estate Brokerage. “A release of pent-up housing demand turned out to be the major driving force in late 2024.”
December was the fourth straight month that the decline in home prices in the 70 cities narrowed, after the central government and local authorities rolled out a series of incentives to bail out the embattled real estate industry.
Meanwhile, lived-in home prices in the same set of cities dropped 0.31 per cent from a month earlier in December, compared with a 0.35 per cent decline in November, NBS data showed.
The property sector and related industries, such as home appliances and construction materials, account for about a quarter of China’s economic output.
An agent speaks with potential buyers near a scale model of residential buildings at a property fair in Shenzhen on October 12, 2024. Photo: Reuters alt=An agent speaks with potential buyers near a scale model of residential buildings at a property fair in Shenzhen on October 12, 2024. Photo: Reuters>
The country’s property market, following three decades of breakneck growth, began retreating in late 2020 when Beijing implemented austerity measures to rein in excessive leverage among the nation’s developers and prevent a financial shock to the economy.