China’s new home prices tumbled at a slower pace at the end of 2021, after hitting a six-year low in November, official data show.
According to the latest new home price indices released by the National Bureau of Statistics (NBS) on Jan. 15, new home prices in 70 tracked Chinese cities slipped 0.2 percent month-on-month in December, lower than the 0.3 percent drop a month earlier.
China’s property market has slowed since June 2021 as regulators stepped up their deleveraging campaign against the bloated sector, triggering defaults at some heavily indebted companies.
Yet the decline moderated as authorities and property developers in multiple Chinese cities introduced measures in December to boost home sales, including subsidies and discounts for buyers.
Average monthly prices fell in 50 of the 70 cities last month, down from 59 in November—the worst since February 2015. New home prices edged down 0.1 percent on a monthly basis in tier-one cities in China, including Beijing, Shanghai, Guangzhou, and Shenzhen, and 0.3 percent in tier-two and tier-three cities, said senior NBS statistician Sheng Guoqing.
New home prices rose 2.6 percent year-on-year in December, slower than the 3.0 percent growth reported in November.
In a recent note, Oxford Economics analysts said they expect central and local authorities to take steps to contain risks from defaults by property developers, such as increasing credit to the sector and tweaking the strict “three red lines” policy introduced to curb borrowing by developers.
On Dec. 30, Chinese regulators ordered beleaguered Evergrande to demolish 39 luxury apartment buildings on a southern tropical island in China within 10 days, the company said earlier this month.
The Chinese developer has spent 81 billion yuan ($13 billion) to build over 60,000 homes at the integrated resort.
Yan Yuejin, research director of Shanghai-based E-house China Research and Development Institute, said he expects property policies to continue to ease in the first quarter given the large economic impact of the real estate market.
