China’s home prices fall for 10th straight month in fresh alarm for stronger policy response, revival plans
- Prices of new homes in 70 major medium and large cities fell 0.3 per cent in March from February, extending sequential monthly decline from May 2023
- Prices of existing homes dropped 0.7 per cent in tier-1 cities; cities in tier-2 and tier-3 suffered a 0.5 per cent erosion
Prices of new homes in 70 medium and large cities fell 0.3 per cent from a month ago, following a 0.4 per cent sequential drop in February, the statistics bureau said in Beijing on Tuesday. They retreated 2.7 per cent from March last year, deepening from the 1.9 per cent annual pace in February, the bureau said.
Prices weakened in 57 of the cities surveyed by the government, versus 59 in February. In the secondary market, prices of existing homes fell in 69 of the 70 cities, versus 68 in February, the government said.
Chinese authorities stepped up efforts to revive the housing market at the start of the year, including injecting more funds for weak developers and cutting interest rates on home mortgages, with little success. More than 30 cities have introduced a “trade-in” scheme to liven up the market.
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“The recovery pace is slower this year,” said Guan Rongxue, a senior analyst at Zhuge Real Estate Data Research Centre in Shanghai. “The trend is expected to extend into April but the rate of decline may narrow.”
The slump is likely to alarm policymakers and prompt a more aggressive response from Beijing. Goldman Sachs analysts this week said that there are “no signs yet of gaming-changing measures” and more than 15 trillion yuan (US$2.1 trillion) may be needed to fix three major problems plaguing the sector: weak funding, excess supply and national rebuilding.
