China's property prices seen dipping in October
Published: Nov 17, 2023 12:06 AM Updated: Nov 17, 2023 12:03 AM
real estate market Photo:VCG

real estate market Photo:VCG

Prices for new and second-hand housing across 70 Chinese large and medium-sized cities declined in October from September, falling for the fourth straight month, data from the National Bureau of Statistics (NBS) showed on Thursday.

New home prices in China's four first-tier cities declined by 0.3 percent month-on-month in October after staying flat in September. Specifically, the new home prices for Beijing declined by 0.4 percent, in Guangzhou by 0.7 percent and in Shenzhen by 0.5 percent, while the figure for Shanghai increased by 0.2 percent month-on-month.

The drop in home prices may be partly down to the further relaxation of local purchasing limits, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, said in a note sent to the Global Times on Thursday.

The policy relaxation and promotions by developers have become part of the mainstream practice, Yan said, which will help to enhance the motivation of home buyers to enter the market. He noted that the price adjustments are reasonable and a normal reflection of changes in supply and demand.

Meanwhile, Yan stressed the importance of corresponding policies to boost market confidence, and the need for local authorities to monitor the property sector.

New home prices in first-tier cities increased by 0.4 percent in October on a year-on-year basis, but the growth rate narrowed by 0.3 percentage points from September.

Prices for second-hand homes in first-tier cities in October turned down by 0.8 percent month-on-month from a 0.2 percent increase in September. The prices for second-hand housing fell 1.1 by percent compared with the previous month in Beijing, by 0.8 percent in Shanghai and Guangzhou, and 0.5 percent in Shenzhen.

The supply and demand in the second-hand home market is unbalanced and there is a lack of effective policy support to rectify the situation, said Yan, adding that activating the second-hand home market would also help the new home market.

Since late August, China has unveiled a raft of measures to promote the sound development of the property sector.

The Ministry of Housing and Urban-Rural Development announced in August that it is in favor of the re-adjustment of mortgage policies, leaving it to city-level governments to decide to treat families that own no property in the region as first-home buyers eligible for favorable mortgage rates.

Meanwhile, existing mortgage rates for first-home purchases were also lowered starting in late September, enabling tens of millions of borrowers in China to enjoy the benefit. Both measures were aimed at boosting market consumption, and easing home buyers' mortgage burden.

Song Ding, a research fellow from the China Development Institute, told the Global Times on Thursday that China's property industry is still in a recovery cycle and needs further macro driving forces to build market confidence.

Global Times