BEIJING: 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% from a year earlier, hitting the lowest since June 2015, deeper than a 3.9% slide in May, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
Prices were down 0.7% month-on-month in June after a 0.7% 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 $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.
“The structure of supply and demand in the property sector has been fundamentally reversed. (The market) does not need to have excessively high expectations of the effects of the policies,” said Zhang Dawei, analyst at Centaline Property Agency Ltd.
“It is unlikely that there will be a rise across the board in the sector in the future,” Zhang said.
Property investment fell 10.1% in the first half of 2024 from a year earlier, and home sales by floor area fell 19.0%, deeper than a 20.3% slump in the first five months of the year, separate NBS figures showed.
Markets will closely scrutinise directives from the Communist Party leadership meeting starting on Monday where key economic issues will be discussed. Measures that redistribute income from central authorities to local municipalities and curbing an addiction to land sales laid bare by China’s property crisis will top the agenda, policy advisers say.
Source Homevior.in
