China’s new home prices fall at fastest pace in over 3 years in February, survey shows

[BEIJING] China’s new home prices fell at the fastest pace in more than three years in February, a private survey showed on Sunday (Mar 1), underscoring the property sector’s struggle to find a floor despite a stream of policy support.

New home prices in 100 cities slipped 0.04 per cent month on month, reversing a 0.18 per cent gain in January and marking the steepest decline since December 2022, according to China Index Academy, one of the country’s largest property research firms.

Official February price data for 70 cities is due on Mar 16. The data has shown prices have not posted a monthly increase since May 2023.

The prolonged property downturn, once a key engine of economic growth, has eroded household wealth, crimping consumption in the world’s second-largest economy.

Demand has remained subdued despite rounds of policy support since the sector slid into crisis in 2021, including looser purchase rules and reduced down-payment requirements.

Shanghai last week introduced steps to loosen home purchase restrictions, including allowing eligible buyers to purchase additional homes and to access higher mortgage limits.

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“Such measures could offer a short-term boost to the market, but cannot reverse the broad down-cycle,” said Larry Hu, head of China economics at Macquarie Group, in a research note last week.

“Given the housing bust with home prices falling to the level in 2016, reversing such a trend would require much stronger policy intervention to reset market expectations,” Hu said, adding that he did not expect policymakers to introduce “unconventional measures” at this stage. REUTERS