China's New Home Prices Decline

By Liangping Gao and Ryan Woo
BEIJING (Reuters) – China's new home prices in October fell the most year-on-year since 2015, official data showed on Friday. This decline suggests that recent support measures aimed at stabilizing the crisis-hit property sector have had minimal impact thus far.

In annual terms, new home prices slid 5.9% in October, continuing a 16-month streak of declines, following a 5.8% drop in September.

However, on a month-to-month basis, new home prices decreased by 0.5%, marking the slowest decline since March, after a 0.7% dip in September. According to Reuters calculations based on data from the National Bureau of Statistics (NBS), the month-on-month decline in home prices narrowed across large, medium, and small cities – tier-one, tier-two, and tier-three cities, according to the NBS's statement.

Notably, 75.9% of respondents in a recent NBS poll expect new home prices to remain stable or rise within the next six months, showing an increase of 17.6 percentage points from the previous survey. Only three of the 70 cities surveyed reported growth in year-on-year home prices in October, compared to two cities in the prior month.

Since last year, China has intensified its efforts to stabilize the property sector that plunged into crisis in 2021. These efforts include injecting more funds to support cash-strapped developers and reducing borrowing costs.

In a recent move, the finance ministry introduced new tax incentives to further lower home purchase costs and stimulate demand. Additionally, China cut benchmark lending rates by 25 basis points in October to boost demand.

Policymakers have also committed to ensuring the timely delivery of pre-sold homes, a significant concern for home buyers, with 2.85 million homes delivered nationwide as of November 13, according to the housing regulator.