China's home prices fell at a faster pace in May, as the country's most aggressive efforts to support the property market took time to revive demand. (Source: Wang Zhao/AFP)
New home prices in 70 cities, excluding state-subsidized housing, fell 0.71 percent from April, the most since October 2014, the National Bureau of Statistics showed yesterday (June 17). The value of existing homes fell 1 percent, the sharpest decline since at least 2011, when China began using the current data collection method.
Last month, China announced a sweeping real estate rescue package aimed at clearing the biggest cloud hanging over the Chinese economy , easing mortgage regulations and encouraging local governments to buy unsold homes.
Three of the country’s largest cities, Shanghai, Shenzhen and Guangzhou, have since rolled out major easing policies for homebuyers, cutting down payment requirements and making mortgages cheaper. But the capital, Beijing, has remained largely indifferent.
However, investors and analysts remain skeptical that the measures will be enough given the limited central bank funding available so far and the slow progress of existing pilot programs in some cities. The oversupply of housing has pushed down home prices, leaving fewer reasons for people to invest in real estate.
Wall Street economists are anticipating new measures and additional funding in Beijing’s efforts to shore up the market, after top policymakers urged officials at a cabinet meeting earlier this month to keep an “open mind” on policies to reduce housing inventory and be “more creative, rational and bold” in rolling out support measures.
JPMorgan Chase & Co. real estate analyst Karl Chan expects further easing of restrictions on home purchases. HSBC Holdings Plc economists including Jing Liu predict more measures to clear inventory.
New moves are especially likely if the property market fails to improve further in the coming months, according to Goldman Sachs Group Inc. economist Hui Shan.
Hong Van (According to Bloomberg )
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