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China's new home prices declined at their fastest pace in more than three years in February, according to a private survey, highlighting continued stress in the property sector. Prices across 100 cities fell 0.04% month-on-month, reversing January's gain and marking the steepest drop since late 2022. The downturn has persisted despite multiple policy measures, including relaxed purchase rules and lower down-payments. Analysts believe recent steps by Shanghai may offer limited short-term support but are unlikely to reverse the broader market correction without stronger intervention.
China's new home prices fell at the fastest pace in over three years in February, signalling that the country's property market remains under pressure despite several rounds of policy support. Advertisement
Data released over the weekend by the China Index Academy showed that new home prices in 100 cities slipped 0.04% month-on-month. This reversed a 0.18% increase recorded in January and marked the sharpest monthly decline since December 2022.
Official data for 70 cities is scheduled to be released on March 16. Earlier trends have shown that home prices have not registered a monthly rise since May 2023, indicating a prolonged correction phase in the housing market.
China's property sector, once a major contributor to economic growth, has remained in a downturn since entering a crisis in 2021. The slowdown has weakened household wealth and affected consumption levels in the world's second-largest economy. Developers have struggled with liquidity stress, delayed projects and cautious buyers, leading to continued price pressure.
Authorities have rolled out multiple support measures over the past few years. These have included easing home purchase restrictions, lowering down-payment requirements and relaxing mortgage conditions. However, demand has remained weak.
In Shanghai, fresh measures were introduced in the past week to loosen home purchase rules. Eligible buyers are now permitted to purchase additional homes and access higher mortgage limits, in an effort to improve market sentiment in one of China's key property markets.
Larry Hu, head of China economics at Macquarie Group, said in a recent research note that such measures could provide a short-term boost but would not reverse the broader down-cycle. He further noted that with home prices having fallen back to levels last seen in 2016, a meaningful turnaround would require much stronger policy intervention to reset market expectations. At this stage, he did not expect policymakers to introduce unconventional measures.
The continued decline suggests that while targeted easing may stabilise specific cities, the overall sector is yet to find a clear floor.
Source PTI
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