New home prices in 70 cities, excluding state-subsidized housing, fell 0.38 percent last month from a 0.3 percent decline in September, the National Bureau of Statistics said Thursday, the steepest decline since February 2015.
The decline adds to evidence of a prolonged housing downturn after official data this week showed property sales and investment falling further.
After a period of tightening, the Chinese real estate market has plummeted, affecting the economy . Illustration photo: Internet.
From there, Bloomberg concluded that new stimulus measures rolled out in major cities since August have done little to turn around the sector, which is dragging down China's economic recovery.
Only tier-2 cities, mainly provincial capitals, saw narrower price declines amid easing home purchase restrictions. In tier-1 cities, prices fell 0.35%, slowing sharply from a 0.05% decline a month earlier.
The short-lived housing market recovery earlier this year after China reopened from Covid-19 “turned out to be short-lived,” said Chen Wenjing, deputy director of research at China Index Holdings.
“Homebuyers are hampered by tight incomes and an uncertain property market outlook,” he added.
Bloomberg Intelligence’s gauge of Chinese property developers fell as much as 1.4% on Thursday morning, extending its decline this year to 43%.
In its latest move to support the property sector, Beijing is planning to provide at least 1 trillion yuan ($138 billion) of low-cost financing for urban village renovation and affordable housing programs.
While the details of the new plan remain unclear, some economists say the policy could be less effective than previous efforts. The new programs will be primarily in some of the largest metropolitan areas, outside of lower-tier cities where the recession was most severe.
China's property crisis has engulfed most of its biggest property developers, which have struggled to repay debts and complete projects since the credit crunch three years ago.
China Vanke - one of the country's few remaining investment-grade construction firms, has seen its dollar bonds plunge in recent weeks following the default of industry giant Country Garden Holdings.
Khanh Vy (According to Bloomberg)
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