By Liangping Gao and Ryan Woo
BEIJING (Reuters) – China’s new home prices fell the most year-on-year in October since 2015, but a narrowing monthly rate of declines suggested the property sector was beginning to stabilise with a barrage of support from the government.
In annual terms, new home prices slid 5.9% in October, in their 16th consecutive month of declines, after a 5.8% drop in September.
However, month-on-month, new home prices were down 0.5% in their slowest decline since March, after dipping 0.7% in September, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
The month-on-month fall in home prices narrowed in large, medium and small cities – tier-one, tier-two and tier-three cities, said NBS in its accompanying statement.
In a sign of a potential shift in sentiment, NBS said 75.9% of respondents in its poll expect new home prices to remain stable or rise in the next six months, up 17.6 percentage points from the previous poll.
Three of the 70 cities surveyed posted growth in year-on-year home prices in October, up from two cities the previous month.
The government said the data showed policies introduced to support the property sector, which plunged into crisis in 2021, were starting to have an effect.
The property market was stabilising and there were early signs that home prices were bottoming too, an NBS spokesperson, Fu Linghui, said at a news conference on Friday.
Cash flows of property developers were also improving, and the bureau was optimistic about the trend, Fu said.
Property investment fell at a faster pace from January to October but sales narrowed the slump, separate official data showed.
Analysts, however, questioned whether there would be much of a rebound in the sector.
“Property support measures do seem to be providing some relief to the housing market – new home sales picked up by the most since May last month,” Capital Economics’ China economist Zichun Huang said in a note.
But Huang added that unless moves by local governments are “followed by substantial fiscal easing next year, which seems unlikely, the boost is likely to be short-lived”.
On Wednesday, the finance ministry introduced new tax incentives to further lower the cost of home purchase and spur demand, in its latest efforts to revive the sector.
China cut benchmark lending rates by 25 basis points in October to boost demand.
Policymakers pledged to press for the timely delivery of pre-sold homes, a major concern for home buyers. A total of 2.85 million homes had been delivered nationwide as of Nov. 13, the housing regulator said earlier this week.
