China’s new home prices show signs of improvement following Beijing’s easing measures, but Covid-19 lockdowns could hurt recovery
- Narrower decline of 0.1 per cent in February shows ‘easing measures did help’, analyst says
- But resurgence of Covid-19 infections in first-tier cities could sap some demand
The decline in China’s new home prices narrowed last month, as easing measures rolled out to revive its ailing US$1.7 trillion housing market took effect.
The average price of new homes in the 70 cities covered by the National Bureau of Statistics (NBS) fell 0.1 per cent in February, down from the 0.3 per cent decline recorded in January, according to data released on Wednesday. The average price of lived-in homes dropped 0.3 per cent last month, the same as January.
“This shows that the easing measures did help to slow down price declines,” said Yan Yuejin, the director of Shanghai-based E-house China Research and Development Institute. “But there is still a long way to go before the market reverses to an obvious rising trend.”
The improvement in prices of new flats came after the central government rolled out some easing measures, including lower mortgage rates and faster home loan procedures, to help improve sentiment. These prices have now fallen for six consecutive months since September.
The resurgence of Covid-19 infections in China’s first-tier cities, however, could sap some demand.
Shenzhen, the southern technology hub seen as “China’s Silicon Valley”, will be locked down for seven days until March 20 for three rounds of citywide mass screening. The neighbouring industrial city of Dongguan will also deploy similar Covid-19 containment measures.