BEIJING: New home prices in China fell more slowly in December than a month earlier, official data showed on Saturday, as marginal easing of financing restrictions and promotions by property developers helped stabilize the request.
Average new home prices in China’s 70 major cities fell 0.2% in December from the previous month, slower than a 0.3% decline in November, Reuters calculated from data published by the National Bureau of Statistics (NBS).
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.
But the decline moderated as authorities and property developers in several cities introduced measures in December to boost home sales, with local governments offering subsidies to buyers and property companies offering discounts.
Monthly prices rose in 15 of 70 cities, compared with nine cities that reported price increases in November.
“The real estate market is gradually bottoming out with the end of the tightest credit period,” said Zhang Dawei, chief analyst at real estate agency Centaline. First- and second-tier cities will be the first to emerge from the recession, he said.
New home prices rose 2.6% year-on-year in December, less than the 3.0% growth recorded in November.
In a recent note, analysts at Oxford Economics said they expect central and local authorities to take steps to contain property developer default risks, such as increased credit to the sector and the adjustment to the strict “three red lines” policy introduced to curb borrowing by developers. .
A payment extension granted by bondholders to beleaguered developer China Evergrande Group came amid growing pressure from authorities on the need to maintain economic stability.
Yan Yuejin, research director of the Shanghai-based E-house China Research and Development Institute, said he expects real estate policies to continue to ease in the first quarter given the significant economic impact of the real estate market.
“The December data is a positive sign, indicating that house prices are not falling further.”
(Reporting by Liangping Gao and Andrew Galbraith; Editing by Muralikumar Anantharaman and Simon Cameron-Moore)