China’s May new home prices up slightly, private survey shows

CHINA’S new home prices rose slightly in May from a month earlier, a private survey showed on Wednesday (Jun 1), amid still fragile overall demand as tighter Covid-19 curbs dented confidence in the property market.

New home prices in 100 cities rose 0.03 per cent, compared with the 0.02 per cent gain in April, according to survey data from China Index Academy, one of the country’s largest independent real estate research firms.

China’s property market, a key driver of the economy, has been faltering for a year and weakened further in recent months as strict Covid containment measures weighed on demand despite more policy easing policy.

The commercial hub of Shanghai lifted its lockdown on Wednesday, after two months of bitter isolation.

In May, more than 60 cities including some provincial capitals eased policies to bolster the sector, but most of the measures focused on boosting home purchase demand via cuts in mortgage rates, smaller downpayments and subsidies.

The northern city of Taiyuan, capital of Shanxi province, said on May 23 that it will give deed tax subsides and called for banks to offer smaller downpayments for first home buyers.

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Local governments are likely to accelerate their easing steps in June, with tier-two cities expected to relax home purchase restrictions for households with more than one child, the China Index Academy said.

Among 100 cities surveyed by the academy, 40 cities reported growth in new home prices on a monthly basis. New home prices in Shanghai dropped 0.01 per cent from a month earlier, compared with no change in April.

Financial regulators have pledged to keep credit growth stable in the property sector and help homebuyers affected by Covid-19 outbreaks to defer their mortgage payments, the central bank said last week.

China’s property market problems are likely to worsen this year, with no growth in home prices seen for the full year, according to the latest Reuters poll. REUTERS