Beijing, Shanghai stay as favoured markets while China’s new home prices struggle for broad recovery despite easing measures

Name: Anger mounts as China's property debt crisis leaves flats unfinished
Uploaded: 2023-10-19T07:31:57.000Z
Duration: 4 min 49 s
Description: Anger mounts as China's property debt crisis leaves flats unfinished

Weighted average price for new homes in major mainland Chinese cities fell in September, albeit at a slower pace than in August

Beijing and Shanghai showed improvement as consumers continue to keep faith in demand and outlook in top-tier cities

Reading Time:2 minutes

Why you can trust SCMP

Residential buildings developed by troubled Sunac Chiina, in Beijing. Photo: Bloomberg

Salina Li

Published: 3:31pm, 19 Oct 2023Updated: 5:25pm, 19 Oct 2023

New home prices in mainland China fell at a slower pace in September, aided by a recovery in top-tier cities like Shanghai and Beijing, according to a government report, as state-driven easing measures produced an uneven revival in the housing market.

Weighted average prices weakened 1.4 per cent from a month earlier on a seasonally-adjusted basis, compared with a 2.8 per cent decline in August, according to Goldman Sachs, citing prices in 70 cities released by the statistics bureau on Thursday. Nomura said prices weakened 0.3 per cent, versus a 0.29 per cent drop in August.

The latest data indicates that Beijing’s measures including cheaper borrowing costs and easier mortgage repayment terms are not enough to stem two years of industry slump. The mainland property market remained a drag on the broader economy, limiting annualised growth at 4.9 per cent in the third quarter, versus 6.3 per cent a year earlier.

04:49

Anger mounts as China's property debt crisis leaves flats unfinished

“[The readings] show continued weakness in almost every aspect of the property market,” Nomura analyst Jizhou Dong said in a note to clients on Thursday. “What is more concerning to us is the seemingly limited willingness of the central and local governments to introduce more policies to stabilise sales and investments.”

New home prices fell in 45 of the 70 large and medium-sized cities compiled by the statistics bureau versus their levels a year earlier, up from 44 in August. Prices of existing homes decreased year-on-year in 67 cities, versus 66 in August, the report on Thursday showed.

China’s top-tier cities continued to prosper as consumers showed their preference and confidence in demand for properties in big cities. Prices stabilised in September, following a 0.2 per cent drop in August. Prices of new homes in Beijing and Shanghai rose by 0.4 per cent and 0.5 per cent, respectively.