Prices of China’s new homes grow at the weakest pace in eight months as purchase curbs bite hard amid a slowing economy
- The slowdown was mainly dragged by second and third-tier cities, while first-tier cities staged a rebound to hit the highest in more than two years
- Weak price data could vindicate more policy easing this year as Beijing tried to prop up domestic demand
Prices of China’s new homes grew at the slowest pace in eight months in December, as the government’s curbs on speculation dampened sentiments amid a slowing economy, their impact particularly hard-felt in the country’s smaller cities.
The prices of new homes rose by 0.77 per cent last month across 70 cities monitored by the government, according to Bloomberg’s calculation of data released by the National Bureau of Statistics. This was slower than the 0.98-per cent gain in November, and was the slowest clip since April 2018.
“The continuous slowdown in prices suggests that some developers are cutting the prices of newly launched projects to boost year-end sales,” said Yan Yuejin, research director at E-House China R&D Institute.
The weak price data vindicates a gradual move by the central government to give provincial and local authorities the discretion to roll back some of their property curbs to prop up the economy. At least three cities – Guangzhou, Zhuhai and Heze in Shandong province – have already begun to relax some of their curbs.
The prices of new homes rose in 59 of the 70 cities being monitored last month, compared with 63 in November, and 65 in October. The slowdown was most prominent in so-called second-tier and third-tier cities, whose monthly increases slowed to the weakest since August.