China home-price slump persists even as authorities vow to address downturn
The prolonged property crunch is fuelling a rising sense of anxiety among Chinese officials
[BEIJING] China’s home-price slump dragged on in November, the latest chapter in a years-long downturn that policymakers have promised to address with intensified efforts.
New-home prices in 70 cities, excluding state-subsidised housing, dropped 0.39 per cent from October, when they slid 0.45 per cent in the biggest decline in a year, figures from the National Bureau of Statistics showed on Monday (Dec 15). Resale home values, which are subject to less government intervention, fell 0.66 per cent, the same pace as a month earlier.
The readings put the spotlight on mounting problems in China’s property sector, where a four-year downturn has weighed on sentiment and become a hurdle to economic growth. The rising financial woes of industry bellwether China Vanke have raised troubling questions about another painful debt crisis in the sector.
The home market will likely face a “harsh reality” in 2026, Citigroup analysts led by Griffin Chan wrote in a report last week. The US bank expects national sales to decline another 11 per cent in value next year, unless liquidity improves.
The prolonged property crunch is fuelling a rising sense of anxiety among Chinese officials, who are considering measures including mortgage subsidies and tax rebates, Bloomberg News has reported. At a key economic meeting last week, policymakers pledged to encourage the acquisition of existing housing stock, a measure widely considered necessary to reduce sky-high housing inventories.
Officials recently also ordered two private data agencies to freeze the publication of home sales data. Shanghai authorities have censored posts that express a pessimistic outlook about the real estate sector.
Home prices will keep falling for at least two more years, John Lam, UBS Group’s head of China property research, said in an interview before the latest announcement. Lam, who was previously optimistic in an industry recovery, added that values of used homes in major cities are down more than a third from their peak levels.
Fitch Ratings warned in October that new-home sales by area could decline another 15 to 20 per cent before the sector stabilises. The bleak outlook suggests banks’ property-related bad debt will likely stay “elevated” next year, Fitch said. BLOOMBERG
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