China’s new home prices inch up for 9th month in May, survey shows

[Pelican Press 0]

China’s new home prices inch up for 9th month in May, survey shows

A real estate complex under construction in Huai ‘an city, Jiangsu Province, China, June 20, 2023.

Costfoto | Nurphoto | Getty Images

New home prices in China rose slightly for a ninth month in May, a private survey showed, driven higher by a slew of supportive steps to prop up the nation’s crisis-hit property sector.

The average new home price across 100 cities rose 0.25% on month in May, following a 0.27% gain in April, the data from real estate researcher China Index Academy showed on Saturday.

China’s property sector, a pillar of the economy, has lurched from one crisis to another since 2021 after a regulatory crackdown on high leverage among developers triggered a liquidity crisis.

The government is struggling to boost home sales or increase liquidity by taking a series of stimulus and easing measures.

China announced “historic” steps in mid-May to stabilize the sector, with the central bank easing mortgage rules and facilitating 1 trillion yuan ($140 billion) in extra funding, and local governments committing to buying apartments.

Investors hoped the measures marked the beginning of more decisive government intervention to boost homebuyer demand and slow falling prices.

“After the implementation of the new policy, the number of visits to some core city projects has increased, but it will still take time from the increase in house viewings to a pickup in transactions,” said China Index Academy in the survey report.

“Looking to the future, the pace of market recovery still depends on changes in residents’ income expectations.”

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