China's new home prices fell at their fastest pace in more than nine years in August 2024, official data showed on September 14, as government support measures failed to spur a significant recovery in the property sector.
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| Official data released on September 14 showed that new home prices in China fell at their fastest pace in more than nine years in August 2024. (Source: Getty) |
New home prices in China fell 5.3 percent year-on-year in August, the fastest decline since May 2015, compared with a 4.9 percent drop in July, according to data from the National Bureau of Statistics (NBS).
On a monthly basis, China's new home prices in August 2024 marked the 14th consecutive month of decline, down 0.7% from the previous month and matching the decline in July.
China's property market continues to see heavily indebted developers, a rise in unfinished apartments and a decline in buyer confidence, putting pressure on the financial system and threatening China's 5% economic growth target this year.
China's home prices are expected to fall 8.5% in 2024 and a further 3.9% in 2025, as the sector struggles to stabilize, according to a Reuters survey.
China’s property market is still in the process of bottoming out, with demand, income and homebuyer confidence taking time to recover, said Zhang Dawei, chief analyst at real estate brokerage Centaline. “The market is expecting stronger policy,” he said.
In the eight months since the beginning of 2024, real estate investment in China has fallen 10.2% and home sales have fallen 18% compared to the same period last year.
Chinese policymakers have stepped up efforts to support the sector, including cutting mortgage rates and lowering home prices, which has helped to spur demand in major cities. Smaller cities, which have fewer restrictions on home purchases and high inventory, are particularly vulnerable, highlighting the challenge Chinese authorities face in balancing supply and demand across regions.
Of the 70 Chinese cities surveyed by the NBS, only two reported both monthly and yearly increases in home prices in August 2024.
"Given the outlook for slower growth in the second half of the year due to new headwinds, we expect the Chinese government to be forced to directly provide financing for pre-sold but delayed housing projects," said a research report by financial firm Nomura.
According to Bloomberg , China may cut interest rates on more than $5 trillion of outstanding mortgage loans as early as this month. To support the mortgage rate cuts, economists at ANZ believe that the People's Bank of China (PBoC) will cut the five-year benchmark rate in September, along with a 0.20 percentage point cut in the medium-term lending facility (MLF) rate and a 0.50 percentage point reduction in the reserve requirement ratio (RRR).
Source: https://baoquocte.vn/new-house-prices-fall-fastest-in-9-years-what-is-happening-within-the-china-real-estate-market-286446.html
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