A gauge of new home prices in China slid 0.3 per cent in July, adding to the steepest drop in eight months in June as a slew of recent government support measures did little to revive citizens’ interest in property investment.
The month-on-month drop in new home prices across 70 major cities matched the decline in the previous month, which was the sharpest since a 0.5 per cent fall in October, according to National Bureau of Statistics data released on Friday.
New home prices have been sliding since April 2022 on a year-on-year basis. Last month, they fell by 3.4 per cent from a year earlier, narrowing from a 3.7 per cent decline in June.
Authorities have introduced a series of measures since September to support the housing sector. This month, the Beijing municipal government made a surprise move to lift home-purchase restrictions in the city’s outlying areas, a step analysts said could signal similar measures in Shanghai and Shenzhen.
Prices in China’s four first-tier cities fell 0.2 per cent in July from a month earlier, when they dropped 0.3 per cent. In the southern metropolises of Guangzhou and Shenzhen, prices declined steadily over the last quarter, falling 0.3 per cent and 0.6 per cent, respectively. In Beijing, July prices were unchanged, while Shanghai continued to buck the trend, with prices rising 0.3 per cent to cap more than three years of increases.
Demand remains lacklustre, with cautious consumers adding to their savings rather than investing in homes, thus extending the struggles of developers, which have been battling a liquidity crunch since a nationwide deleveraging campaign began in late 2020 to rein in debt in the sector. China Evergrande, once China’s biggest developer, said it would delist from the Hong Kong stock exchange this month, nearly four years after it first defaulted. Meanwhile, other major developers including Country Garden, Sunac and Vanke continue to wrestle with heavy debt burdens.
