China’s home prices halt 16-month skid to hold firm in January as Beijing rescue measures stabilise demand
- Prices for new homes in mainland China did not decline in January for the first time since August 2021, according to statistics released on Thursday
- In China’s tier-1 cities, the average new-home price increased 2.1 per cent in January compared with a year earlier
Prices for new homes in mainland China did not decline in January for the first time since August 2021, as relaxed Covid-19 restrictions and Beijing’s roll-out of more supportive measures for the property sector stabilised demand.
The average new-home price in 70 medium and large cities in China remained unchanged in January, compared with a 0.25 per cent month-on-month slip in December, according to data announced by the National Bureau of Statistics on Thursday.
Prices for new homes in 36 out of the 70 tracked cities increased on a month-on-month basis in January – 21 more than in December. Only 33 cities saw falling prices, versus 55 in December, while one city saw no change.
Meanwhile, prices for lived-in homes rose in 13 cities, up from seven in December, while 57 cities recorded decreases, compared with 63 in December.
“Even after adjustments for seasonal variations, the data still present a sentiment of recovery and improvement among China’s major cities,” said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute.
On a year-on-year basis, 15 cities recorded an increase in new-home prices in January. In tier-1 cities, the average new-home price increased 2.1 per cent in January compared with a year earlier, while the average price in the secondary market increased 0.9 per cent.
Moody’s expects China property sales to continue to fall this year
Chinese authorities in late November launched a series of supportive measures to rescue the property sector, including supporting developers’ financing and lowering mortgage rates for homebuyers.
Some 30 local governments in China launched various measures between December and January, from relaxing purchase restrictions to cutting the home loan rates for homebuyers, to boost demand and stimulate house sales.
“Though the country’s economy and the people’s income are gradually recovering from the impact of the Covid-19 pandemic, residents’ consumption confidence is still restrained under a complex and uncertain economic environment,” said Xu Xiaole, chief analyst with the Beike Research Institute.
“Supported by the government policies, the home market is expected to see a mild recovery rather than strong growth compared with last year, while home prices are forecast to remain stable.”
