China’s new home prices fell at the fastest pace in nine years in June, official data showed on Monday, 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.
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 GDP, remains a major drag on the US$18 trillion economy.
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.
“Recent supports are a step in the right direction but are still dwarfed by the scale of the problem. Real estate’s tentacles run deep. When the sector hurts, pain is felt economy-wide,” said Harry Murphy Cruise, economist at Moody’s Analytics, in a research note.
Official data also showed China’s economy grew 4.7 per cent in April-June, its slowest since the first quarter of 2023 and missing a 5.1 per cent analysts’ forecast in a Reuters poll.
Source: NST Online
