As China’s home prices fall for 13th month, analysts call for more measures to support developers, revive sales
- New home prices in 70 cities fell 0.28 per cent month on month in September
- Although home sales slumped 15 per cent in September, it was an improvement from the 21 per cent decline in August
Home prices in China fell for the 13th straight month in September as sentiment remained weak, with analysts saying the government has to implement stronger measures to address the woes of the nation’s property sector.
New home prices in 70 cities, excluding state-subsidised housing, dropped 0.28 per cent month on month, compared with 0.29 per cent in August, according to National Bureau of Statistics (NBS) data compiled by Bloomberg on Monday. Existing home prices declined 0.39 per cent last month, the most since October 2014.
On a year-on-year basis, new home prices fell 1.5 per cent in September, the fastest pace of decline since August 2015, according to Reuters calculations based on the NBS data. Prices fell 1.3 per cent in August.
“The drop in China’s home prices was within market expectations, given the state of the economy, the Covid-19 situation and negative news from developers,” said Raymond Cheng, head of China and Hong Kong research and property at CGS-CIMB Securities.
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“The government needs to revive homebuyer and market sentiment, and the current policy measures are not enough to solve the main problems of securing enough financing for property developers and boosting home sales.”
China’s property sector has faced a series of headwinds since the central government introduced the “three red lines” policy in August 2020 to curb borrowing and leverage in the sector. Rising debt defaults among distressed developers and a mortgage-boycott crisis in dozens of cities across the mainland has affected demand, putting home prices under pressure.