China home prices fall at slower pace in fragile recovery

BEIJING - China’s home price declines eased for a third month in November, suggesting values are beginning to stabilise as policymakers step up efforts to end the property slump. 

New-home prices in 70 cities, excluding state-subsidised housing, dropped 0.2 per cent from October, the smallest decrease in 17 months, National Bureau of Statistics figures showed on Dec 16. Values of used homes fell 0.35 per cent, the least since May 2023. 

China’s housing downturn has weighed on Asia’s largest economy for more than three years. The figures offer a glimmer of hope for the market after recent stimulus measures failed to sustain a rebound in sales – a prerequisite for putting a floor under prices, according to Fitch Ratings. 

“The recovery is still fragile and not broad-based,” said Mr Raymond Cheng, head of China property research at CGS International Securities Hong Kong. “Property markets in small cities are still very challenging with high inventory levels.” 

From a year earlier, new-home prices fell 6.1 per cent in November, easing slightly from October’s 6.2 per cent drop. Existing-home prices slid 8.5 per cent, less than 8.9 per cent a month earlier.

Top officials led by President Xi Jinping last week vowed to stabilise the property market in 2025 in an announcement following the two-day Central Economic Work Conference. A housing ministry official reiterated the pledge on Dec 14. 

But they provided no incremental details, unlike in previous policy communications, according to Goldman Sachs Group analysts. 

The improvement in home sales stands in contrast with private data released earlier. Transactions by the 100 biggest real estate companies shrank 6.9 per cent in November from a year ago, reversing a brief gain in October, China Real Estate Investment figures showed.

More recently, property sales growth has cooled a bit in the first half of December, according to data tracked by UBS Group. 

Steadying residential sales and prices “will take time, and the expected US tariff hike would bring fresh downward pressure”, UBS economists wrote in a recent note. The bank now expects sales to stabilise in the first half of 2026, with declines narrowing to 5 per cent to 10 per cent in 2025. 

“The wave of stimulus measures from September could be producing a short-lived recovery instead of a sustainable one, and that suggests the need for more policy support going into 2025,” said Bloomberg Intelligence analyst Kristy Hung. “We are still expecting a drop in new home sales volume as well as prices.”

Prices of new homes will fall another 5 per cent in 2025, as measured by China’s official statistics bureau, Fitch Ratings said earlier. 

China’s economic outlook for 2025 and beyond is increasingly uncertain, even though the work conference reaffirmed that it is on track to hit 2024’s official growth target of around 5 per cent.

Many economists expect the government to set a similar goal for 2025. BLOOMBERG