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. 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. Covid-19 lockdowns could hurt recovery of China’s new home prices 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. Moreover, contracted sales at China’s top 100 developers slumped by 47 per cent in the first quarter of 2022 from a year earlier. China’s prices of old and new homes narrowed their declines in January More than 60 municipal authorities started easing property restrictions in the first quarter. Local governments also moved to reduce down payments, subsidise house purchases, cut mortgage interest rates and to provide financial support to developers. Top policymakers have also eased borrowing costs and pumped the financial system with more cash. The finance ministry, meanwhile, paused the introduction of a trial property tax in more cities, citing poor market conditions. Housing prices rose 0.7 per cent in March from last year, compared with a 1.2 per cent growth in February, and was the 10th consecutive month of a slowdown, according to a separate calculation by Shanghai-based E-house China Research and Development Institute. Shenzhen’s 2021 home sales falls to 15-year low amid market freeze “Although the decline is slower, there are still hurdles to a rebound in prices, as the prices are still sluggish in the third and fourth tier cities,” said Yan Yuejin, director at E-house China Research. Risks of continued declines in housing prices persist, he added. New home prices in third-tier cities declined 0.6 per cent in March from a year earlier, compared with a 4.3 per cent jump in tier-1 cities and a 1.6 per cent rise in tier-2 cities, data from E-house China Research shows.