China home prices fall for 13th month as property woes persist

CHINA’S home prices sank for a 13th month in September, underscoring the country’s challenges to arrest a slumping property market. 

New-home prices in 70 cities, excluding state-subsidised housing, dropped 0.28 per cent last month from August, when they fell 0.29 per cent, National Bureau of Statistics figures showed on Monday (Oct 24). 

The second-hand market fared worse, with existing-home prices declining 0.39 per cent, the most since October 2014.

China’s US$2.4 trillion new-home market remains fragile despite a wave of policies to support the market. Home sales and property investments remain sluggish due to Covid Zero restraints. 

“Potential buyers hold a wait-and-see attitude,” Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities, said before the data release. “Although there are increasing supportive policies from both regulators and local governments recently, it takes time for the effects to trickle through.”

Chinese authorities have eased home ownership rules, trimmed interest rates and urged banks to step up lending in a bid to turn around the ailing property market, which remains a drag on the world’s second-largest economy.

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Hopes for more substantive industry support have dimmed after President Xi Jinping gave little signal of a deeper shift in policies on housing or Covid Zero during the ruling party’s congress.

Home sales fell 15 per cent in September from a year earlier, improving from a 21 per cent decline in August, according to Bloomberg calculations based on cumulative figures released by the statistics bureau following a delay during the party congress. Real estate investment slid 12 per cent year on year, after dropping 14 per cent in August.

A recent central bank survey showed 73 per cent of households expect property prices to stay unchanged or drop in the near term, highlighting dwindling consumer confidence amid bleak job prospects and a weakening economy. BLOOMBERG