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China's home prices drop again in February, but more signs of stability seen
[HONG KONG] Chinese home prices fell again in February from January but the pace of declines slowed in a sign the market is continuing to stabilise, two private surveys showed in an encouraging trend as Beijing steps up stimulus to support a faltering economy.
Prices of new homes in 288 cities fell 0.06 per cent last month, the eleventh consecutive drop on a monthly basis, a poll by real estate services firm Real Estate Information Corporation (CRIC) showed. The drop slowed from a 0.1 per cent decline in January.
Compared to a year before, home prices declined 1.62 per cent, picking up from a 1.22 per cent fall in the previous month, hurt by slow sales during Lunar New Year which fell in January last year.
"The monthly drop of the index has been narrowing since October," said CRIC, owned by E-House China Holdings Ltd."It shows that after almost one year of correction, property prices have now entered into a relatively reasonable level."
"As buyers and sellers are more active in entering the market, it's logical to see prices stabilise or rebound slightly in the first half."
Analysts warn that uncertainty around the property market's outlook, a high level of debt and rising deflationary pressures continue to remain the main risks for the economy as it struggles to push on after growth slowed to a 24-year low in 2014.
China's central bank cut interest rates on Saturday, in the latest effort to support the world's second-largest economy and ward off deflation.
The property industry accounts for some 15 per cent of China's gross domestic product, so signs of a bottoming out in the sector would be welcome news for the government and central bank.
A separate survey by China Real Estate Index System (CREIS)showed average prices in 100 of the biggest cities fell 0.24 per cent in February on-month, reversing a bounce seen in January.
Compared with a year ago, home prices dropped 3.84 per cent, the fifth consecutive month showing an annual fall, compared to 4.59 per cent fall in January, said CREIS, a consultancy linked to China's largest property data provider, Soufun Holdings .
The government is due to publish its February property price data for 70 of the biggest Chinese cities on March 18 and it will report the property sales and investment data on March 11.