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China home-price growth slowest in seven months amid discounts
[SHANGHAI] China's home-price growth slowed for a fourth month in September, as cash-strapped developers cut prices to speed up sales.
New-home prices, excluding state-subsidized housing, rose 0.53 per cent last month from August in 70 major cities, National Bureau of Statistics data showed Monday. That's the smallest gain since February.
The slowdown may be even more widespread. A report Friday showed average home prices across the country fell 0.4 per cent last month, signaling weakening prices in smaller cities not included in the 70-city index.
The challenge for policymakers now will be cushioning the slowdown and avoiding an all-out property crash, which would be devastating for an economy growing at its slowest pace since the early 1990s.
A prolonged housing downturn may push more buyers to the sidelines, spurring developers to offer deeper discounts to keep cash flowing in. The three-biggest home builders have almost USUS$80 billion in short-term debt falling due by June 2020.
Developers have offered discounts of 5 per cent-10 per cent at some projects to speed up sales, said Raymond Cheng, property analyst at CGS-CIMB Securities Ltd.