China‘s New Home Prices Plunge at Record Pace in October
BEIJING, Nov 9 (Reuters) – China’s new home prices fell at their fastest pace in a year in October, according to Reuters calculations based on official data released Thursday, deepening concerns about the country’s property sector and broader economic slowdown. The downturn signals persistent weakness in the housing market despite recent attempts by authorities to stabilize it.
The decline in home prices underscores the fragility of China’s post-pandemic economic recovery, with the property sector – historically a key driver of growth – facing a prolonged crisis. The downturn impacts homeowners,developers,and local governments reliant on land sales for revenue,and raises the specter of further economic headwinds. The situation is being closely watched by global markets, given China’s significant role in the world economy.
Reuters calculations of official National Bureau of Statistics (NBS) data show new home prices in 70 major cities fell 0.2% in October, marking the steepest monthly decline since October 2022. This follows a 0.1% drop in September. Year-on-year, new home prices were down 0.3%, the same as in September.
Of the 70 cities surveyed, 35 saw monthly price declines, while 13 reported increases. Shenzhen saw the largest monthly drop, with a 2.1% decrease, followed by Guangzhou with a 1.4% fall. beijing recorded a 0.2% decline, while Shanghai remained unchanged.
Second-hand home prices fell in 38 of the 70 cities surveyed, with a national average decline of 0.3% month-on-month, accelerating from September’s 0.2% drop. Year-on-year, second-hand home prices fell 5.1%.
The data arrives amid ongoing struggles for major developers like Country Garden and Evergrande, both grappling with massive debt. Authorities have introduced some easing measures, including lowering mortgage rates and reducing down payment requirements in some cities, but their impact has so far been limited.
Ryan Woo, Reuters bureau chief for Beijing, notes that the ongoing situation encompasses issues ranging from economics and politics to asset bubbles and climate change, impacting a broad spectrum of Chinese society.