China’s new home prices continue downward spiral, as sector swings from ‘overheated to over-cooled’
- The average price for 70 cities tracked by the National Bureau of Statistics in November recorded its sharpest decline since February 2015
- China’s property market has ‘gone from overheated to over-cooled’, analyst says
China’s new home prices recorded their biggest month-on-month decline in more than six years in November, amid declining sales and a liquidity crunch in the property sector.
The average price for 70 cities tracked by the National Bureau of Statistics (NBS) fell 0.3 per cent last month from October for their sharpest decline since a 0.5 per cent drop in February 2015, shows data released by NBS on Wednesday.
“New home prices fell for a third straight month, at a faster pace. This indicates the property market has gone from overheated to over-cooled,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute. “Home prices continue to fall largely due to slow sales amid slacking demand. This is also affecting Chinese developers, who are under severe pressure to shore up their cash flow,” he added.
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Fifty-nine of the 70 cities tracked by NBS recorded declines in the prices of new homes last month, the largest number of cities since March 2015, according to E-house China analysis. The cost of lived-in homes also declined, falling in 63 of the cities compared with 64 in October, it said.
The average price of new homes remained flat in China’s tier-1 cities last month, while tier-2 and tier-3 cities saw 0.4 per cent and 0.3 per cent declines, respectively, E-House China said.
