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Published 11:06 IST, July 1st 2024

China's new home prices rise at slowest rate in five months

The latest data indicates that while government interventions have had some impact, the property market in China remains under pressure.

Reported by: Business Desk
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Home prices experienced a 1.7% decline in February
Home prices experienced a 1.7% decline in February | Image: Freepik

China’s Home Prices: New home prices in China saw their slowest increase in five months in June, according to a private survey released on Monday. The average prices across 100 cities edged up by 0.15 per cent month-on-month, a decline from the 0.25 per cent gain recorded in May, data from property researcher China Index Academy revealed.

The subdued price growth comes despite extensive government support measures aimed at revitalising the country's struggling property sector, which has been grappling with a liquidity crunch since 2021, leading to numerous debt defaults among firms. In May, Chinese authorities introduced a comprehensive support package, including reduced down payment requirements and removal of the mortgage rate floor. Additionally, local governments were empowered to direct state-owned enterprises (SOEs) to purchase unsold apartments from developers for conversion into social housing.
Despite these efforts, the value of new home sales at China's top 100 real estate companies plummeted by 41.6 per cent in the first half of the year compared to the same period in 2023, underscoring the challenges facing the sector.

The report from China Index Academy also highlighted a continued decline in second-hand home prices, which fell by 0.73 per cent in June compared to the previous month. This marks the 26th consecutive month of price declines for second-hand homes across the surveyed cities.
The latest data indicates that while government interventions have had some impact, the property market in China remains under pressure, reflecting ongoing structural issues and cautious consumer sentiment amidst economic uncertainties.

With Reuters input

Updated 11:06 IST, July 1st 2024