China home prices fall as slump shows few signs of abating
CHINA’S home prices continued to fall in March, adding pressure on authorities to step up efforts to support the embattled real estate market.
Price declines deepened from a year earlier for both new and used homes, even as they eased slightly on a month-on-month basis, National Bureau of Statistics figures showed on Tuesday (Apr 16).
China’s years-long housing slump has yet to reach a bottom, according to Goldman Sachs Group, even as policymakers ramp up measures to revive demand and alleviate debt strains among developers. Worries over home values, unfinished apartments and an uncertain economic outlook are keeping buyers at bay, dashing hopes for a rebound during the traditional spring busy season.
New-home prices in 70 cities, excluding state-subsidised housing, fell 2.7 per cent in March from a year earlier, steeper than February’s 1.9 per cent drop, the statistics bureau said. They slid 0.34 per cent from February, when they retreated 0.36 per cent.
Existing home prices dropped 5.9 per cent year on year, worsening from 5.2 per cent in January and falling in all 70 cities. They declined 0.53 per cent month on month, improving from a 0.62 per cent decrease in February.
The latest developer to be embroiled in the housing downturn is state-backed China Vanke, which has seen its bonds, shares and credit ratings tumble on concerns about its finances. The builder is preparing an asset package totalling about 130 billion yuan (S$25 billion) to use as collateral as it seeks new bank loans, a source familiar with the matter said.
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China’s top leadership has grown increasingly alarmed about the property crisis and the sluggish economy. A number of state banks are making their strongest effort yet to encourage credit officers to approve loans for developers, Bloomberg reported last week.
Private developers face a four trillion yuan funding gap to complete pre-sold homes, Goldman Sachs analysts wrote this week. BLOOMBERG
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