China home prices fall at slower pace as stimulus takes hold
Figures suggest property values are starting to steady as policymakers step up efforts to end the housing slump
CHINA’S decline in home prices abated for a fourth month in December, reflecting signs of market stabilisation after the government’s latest stimulus blitz.
New home prices in 70 cities, excluding state-subsidised housing, dropped 0.08 per cent from November, the smallest decline in a year and a half, National Bureau of Statistics figures showed on Friday (Jan 17). Existing home values slid 0.31 per cent, easing from a 0.35 per cent drop a month earlier.
The figures suggest property values are beginning to steady as policymakers step up efforts to end the housing slump that has weighed on Asia’s largest economy for more than three years. The downturn has wiped out billions of US dollars in household wealth and added to deflationary pressures.
“The mounting policy support has warmed up homebuyer sentiment,” said Liu Shui, an analyst at China Index Holdings. “However, the broader home-market recovery still faces mounting challenges this year.”
Improvements
Improvements were seen on a year on year basis too, with new-home prices falling 5.73 per cent versus 6.07 per cent a month earlier. Used-home values dropped 8.11 per cent compared with 8.54 per cent in November.
Still, the situation for property developers remains grim. Shares of China Vanke tumbled as much as 9.1 per cent in Hong Kong trading on Friday morning following questions over the whereabouts of its top executive and a local news report that the company may be seized by state authorities.
Plunging sales have raised questions over whether Vanke can meet a wall of debt repayments this year. The firm was once seen as too big to fail due to its government backing, but Beijing has yet to signal its stance towards the property giant.
The home price figures come just days before Donald Trump returns to the White House, threatening tariffs as high as 60 per cent that could wreck trade with the world’s No 2 economy. China’s exporters would then have to find domestic buyers in the face of obstacles abroad.
Promises
Top officials led by President Xi Jinping have vowed to “stem the property market from falling and facilitate its stabilisation”. But policymakers last month provided no incremental details compared with previous policy communications, said Goldman Sachs analysts. BLOOMBERG
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