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China’s new home prices fall at slower pace as authorities loosen curbs, but sector not out of the woods yet, analysts say
- Prices of new homes in 70 major cities dropped by 0.07 per cent in March, slightly narrower than February’s 0.13 per cent decline
- ‘Although the decline is slower, there are still hurdles to a rebound in prices’: E-house China Research and Development Institute director
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China’s new home prices dropped at a slower pace last month as authorities rushed to ease curbs in the property market amid sluggish sales that threaten economic growth.
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Prices of new homes – except those subsidised by the government – in 70 major cities dropped by 0.07 per cent month-on-month in March, slightly narrower than February’s 0.13 per cent decline, according to online property agency Zhuge Zhaofang based on data released by the National Bureau of Statistics on Friday.
“More cities will loosen controls on the property market,” said Chen Xiao, an analyst at Zhuge Zhaofang. The market will continue to recover, although it will be a bumpy road, she added.
March’s slower drop in new home prices provides China’s 18.2 trillion yuan (US$2.9 trillion) property market only temporary respite, as the country’s highly leveraged developers are still struggling with a cash crunch and missed debt payments.
The real estate industry has borne the brunt of Beijing’s deleveraging campaign and tight property policies, which were aimed at curbing speculation in the once sizzling hot market. Developers ranging from giants such as China Evergrande Group and Sunac China Holdings to smaller players such as Zhenro Properties are still embroiled in debt crises.
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