China home prices fall at faster pace despite revival efforts
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China’s home prices fell at a quicker pace in February, worsening for the first time in six months despite the latest efforts to prop up the market.
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BEIJING – China’s home prices fell at a quicker pace in February, worsening for the first time in six months despite the country’s latest efforts to prop up the market.
New-home prices in 70 cities, excluding state-subsidised housing, dropped 0.14 per cent from January, when they dipped 0.07 per cent, National Bureau of Statistics figures showed on March 17. Values of used homes fell 0.34 per cent, the same pace as a month earlier.
Continued price declines may dampen hopes that the real estate market is bottoming out.
Policymakers are struggling to contain the downturn at a time when deflationary pressure is adding to the economic gloom.
“Markets should not forget that China’s property collapse is not yet over,” Dr Lu Ting, chief China economist at Nomura Holdings, wrote in a March 10 report. “From the high-frequency data, the property sector appears to be losing some momentum.”
Year-on-year declines eased slightly. New-home prices fell 5.22 per cent in February, compared with January’s 5.43 per cent drop, the statistics bureau said. Existing-home prices slid 7.53 per cent, versus 7.8 per cent in January.
Residential sales dipped 0.4 per cent in the first two months from a year earlier, improving from a 17.5 per cent drop in 2024, other data showed on March 17. Meanwhile, retail sales and industrial production rose more than economists estimated.
China’s leaders unveiled more steps to shore up the property market at a national Parliament meeting in March, where they also set a bullish economic growth goal despite the escalating trade tensions with the US under President Donald Trump.
They included a pledge to give regional governments more say in how they buy unsold homes to clear inventory. Policymakers are considering scrapping a price cap for the local authorities during that process, Bloomberg reported. The changes could improve some of the plan’s unattractive economics for both developers and state buyers.
The meeting “set a positive policy tone, with the greater autonomy of destocking being a key highlight”, UOB Kay Hian analysts Jieqi Liu and Damon Shen wrote in a March 12 note. “We expect the market to further stabilise in March.”
Beijing also sought to “effectively prevent debt defaults” by real estate companies, signalling a further shift towards aiding more players in the industry. Previously, it had singled out “quality top developers” for support.
China also vowed to “fully unleash the demand” of buyers who are in need of homes or seeking to improve their housing conditions. BLOOMBERG
