CHINA home prices fell the most in eight years in October, potentially worsening buyer sentiment and putting pressure on the government to do more to revive the property market.

New-home prices in 70 cities, excluding state-subsidised housing, declined 0.38 per cent last month from September when they dropped 0.3 per cent, National Bureau of Statistics figures showed on Thursday (Nov 16). The decrease was the steepest since February 2015.

The drop adds to evidence of a persistent housing downturn after official figures this week showed a contraction in sales and property investment deepened. Fresh stimulus measures rolled out at major cities since August have done little to turn around the sector, which is dragging on China’s economic recovery.

A brief housing market rebound earlier this year after China’s post-Covid reopening “turned out to be short-lived”, said Chen Wenjing, associate research director at China Index Holdings. “Homebuyers are deterred by squeezed incomes and the uncertain property market outlook.”

Prices slid 0.58 per cent in the secondary market, the biggest drop since October 2014, the figures showed.

In the latest move to support the real estate sector, Beijing is planning to provide at least one trillion yuan (S$191 billion) of low-cost financing to urban village renovation and affordable housing programmes, Bloomberg News reported this week. While details of the new plan remain unclear, some economists say it may be less effective than earlier efforts. The new programmes would mostly take place in some of the largest metropolitan areas, outside the low-tier cities where the slump is most severe.

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China’s property crisis has engulfed almost all of the largest developers, which have been struggling to repay debts and complete projects since a credit crunch emerged three years ago. China Vanke, one of the country’s few remaining investment-grade builders, saw its dollar bonds plunge in recent weeks on the heels of industry giant Country Garden Holdings’s default. Vanke later received an unusually strong show of support from the local government.

“Property remains the biggest drag amid the rising credit risk among developers,” Larry Hu, head of China economics at Macquarie Group, wrote in a note this week. BLOOMBERG