China new home prices fall at fastest pace in 9 years despite rescue attempts
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New home prices were down 4.5 per cent from a year earlier, hitting the lowest since June 2015.
PHOTO: AFP
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BEIJING - China’s new home prices fell at the fastest pace in around nine years in June, official data showed on July 15, with the battered sector struggling to find a bottom despite government support measures to control oversupply and bolster confidence.
New home prices were down 4.5 per cent from a year earlier, hitting the lowest since June 2015, deeper than a 3.9 per cent slide in May, according to Reuters calculations based on National Bureau of Statistics (NBS) data out on July 15.
Prices were down 0.7 per cent month on month in June, after a 0.7 per cent dip in May.
Since 2021, the property market’s steep downturn has led to a series of developers defaulting, leaving numerous construction sites idle. This has eroded confidence in the sector, traditionally favoured by Chinese households as a safe haven for their savings.
The property sector, which at its peak accounted for a quarter of gross domestic product, remains a major drag on the US$18 trillion (S$24 trillion) economy.
The authorities have rolled out a flurry of support measures, including cutting home-buying costs in major cities and allowing local governments to buy some unsold apartments and turn them into affordable housing.
“The structure of supply and demand in the property sector has been fundamentally reversed. (The market) does not need to have excessively high expectations of the effects of the policies,” said Centaline Property Agency analyst Zhang Dawei. “It is unlikely that there will be a rise across the board in the sector in the future.”
Property investment fell 10.1 per cent in the first half of 2024 from a year earlier, and home sales by floor area fell 19 per cent, compared with a 20.3 per cent slump in the first five months of 2024, separate NBS figures showed.
Markets will closely scrutinise directives from the Communist Party leadership’s meeting from July 15, where key economic issues will be discussed. Measures that redistribute income from the central authorities to local municipalities and curbing an addiction to land sales laid bare by China’s property crisis will top the agenda, policy advisers say. REUTERS
