China’s new home prices extend declines, defying broader recovery
CHINA’S new home prices fell for the third straight month in September, official data showed on Thursday (Oct 19), dashing hopes of a turnaround in demand during a traditionally peak month for home buying despite efforts to revive the crisis-hit property sector.
New home prices fell 0.2 per cent month on month but narrowed from a 0.3 per cent drop in August, according to Reuters calculations based on National Bureau of Statistics data. Prices were down 0.1 per cent from a year earlier, matching August’s decline.
China has quickened the pace of policy stimulus in recent weeks, by relaxing borrowing rules and lifting home-purchasing curbs in some cities, in attempts to boost battered buyer sentiment.
Property sales investment have extended double-digit declines, according to data released on Wednesday, showing the world’s second-biggest economy is not out of the woods yet despite upbeat headline gross domestic product data.
September and October are traditionally peak months for new-home sales in China, with developers offering promotions and releasing new properties to the market.
Of the 70 cities in the home-price data, 54 reported declines in prices last month, up from 52 in August.
Still, support policies boosted housing demand in some major cities, with new home prices up 0.4 per cent from a 0.2 per cent fall in Beijing. However, demand remained lukewarm in smaller cities struggling with excess supply, while nationwide the property sector remains in a deep slump.
China’s property sector, once a key engine of economic growth, has been squeezed by a regulatory crackdown since 2020 as authorities curbed excessive debt, which tightened liquidity and raised default risks for developers.
Investors have also been closely watching Country Garden, China’s biggest private developer, for signs of what may come next for the sector.
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The grace period for a US$15 million coupon payment on a bond issued by the company expired on Wednesday, with no word yet of payment. REUTERS
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