China new home prices rise in January as government signals support

[BEIJING] Average prices of new homes across 100 Chinese cities rose in January, while declines in the secondary market narrowed, a private survey showed on Sunday (Feb 1), following renewed government pledges to stabilise the sector.

New home prices rose 0.18 per cent month-on-month, easing from a 0.28 per cent gain in December, according to the China Index Academy, one of the country’s largest property research firms.

Cities including Chengdu, Shanghai and Hangzhou saw the launch of high-end upgraded housing projects in January, lifting both month-on-month and year-on-year prices in first- and second-tier cities, the research firm said.

By contrast, third- and fourth-tier cities continued to work through existing inventory, with prices falling on both a monthly and annual basis.

Prices in the resale market fell 0.85 per cent from the previous month, narrowing from a 0.97 per cent decline in December.

China’s property sector has struggled since tighter regulations triggered a 2021 liquidity crunch for developers, many of which have since defaulted on debt.

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Local media recently reported that developers are no longer required to report monthly data under the country’s “three red lines” policy, signalling an apparent end to rules that triggered the ongoing debt crisis.

On January 1, Qiushi, the Communist Party’s official journal, said the property sector was “undergoing a profound adjustment,” calling on policymakers to shorten the adjustment period, smooth market volatility, and deliver support in one go rather than piecemeal. Sales are likely to slow in February due to the Spring Festival holiday, but demand should pick up in March as high-quality land in core cities comes to market and developers step up pre-holiday promotions, the research firm said. REUTERS