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Beijing, ChinaNew home prices fell again in December as outbreaks of COVID-19 hurt demand, with Beijing expecting more measures to help sustain the recovery after the end of the pandemic last month. Will be done
New home prices declined in both monthly and annual terms, with continued weak demand posing an obstacle to a steady recovery.
Analysts say the property sector is showing signs of recovery, but it remains uneven and more supportive policies are needed to revive sentiment in the battered market.
Zhang Dawei, chief analyst at property agency Centline, said the sector will remain sluggish in the short term and is likely to stabilize after the second quarter of the year.
“The market needs more policies targeting better demand, especially in tier-one cities.”
Prices fell 0.2% month-on-month in December, the fifth straight month of decline, and at a similar pace to November, according to Reuters calculations based on National Bureau of Statistics (NBS) data released on Monday.
From a year earlier, prices fell for the eighth month in a row, falling 1.5% from a 1.6% drop in November.
Prices in tier-one cities remained unchanged in December from a month earlier, from a 0.2% drop in November.
Official data showed prices in Beijing and Shanghai rose at a slightly faster pace than a month ago, while those in Shenzhen and Guangzhou fell at a slower pace.
In an accompanying statement, the NBS said 55 out of 70 cities saw a month-on-month decline in new home prices in December, four more than in November.
The property sector, a key driver of the world’s second-largest economy, was badly hit last year as debt-ridden developers failed to complete stalled projects and led to mortgage boycotts by some buyers.
A flurry of asset support measures for home buyers and developers in recent weeks, coupled with Beijing’s abrupt scrapping of its zero-COVID policy last month, cheered the market.
The central bank said earlier this month that mortgage rate caps for first-time home buyers could be phased out or phased out in cities where sales prices of new homes fell for three consecutive months. .
According to analysts’ calculations, 38 cities are eligible for adjustable mortgage rate floors, including some tier II cities such as Wuhan and Zhengzhou and more than 20 smaller cities.
Chinese mortgage data provider Rong360 estimates that the average rate for first-time home buyers in 42 major cities in December was 4.16%, down 137 basis points from a year earlier and the lowest since the survey began in 2015.
In a bid to ease restrictions on borrowing for property developers, regulators will reform the “three red line” rule for 30 pilot firms, state media Xinhua reported last week. The policy restricts the amount of new borrowing assets developers can raise each year by putting a cap on their debt ratio.
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