Home prices in China last month fell at the fastest pace in almost a year, data showed yesterday, adding to doubts over whether Beijing’s steps to prop up the property market are enough to revive the sector.
New home prices in 70 cities, excluding state-subsidized housing, fell 0.3 percent last month from August, when they slipped 0.29 percent, Chinese National Bureau of Statistics data showed.
That was the steepest month-on-month drop since October last year.
Photo: Bloomberg
Prices of new homes fell in 54 out of 70 benchmark cities compared with the previous month, while prices were lower year-on-year in 45 out of the 70 cities, the data showed.
Chinese developers are grappling with a years-long slump that has starved them of cash, delayed completion of apartments and deprived the economy of a key growth driver.
Home sales and property investment remained a drag on economic output last quarter, underscoring why policymakers have taken steps to rekindle demand.
The real-estate crisis marked another grim milestone this week when Country Garden Holdings Co (碧桂園) signaled that it was likely to default on a dollar bond for the first time.
The property giant yesterday denied that founder Yang Guoqiang (楊國強) and chairwoman Yang Huiyan (楊惠妍) had fled the country after reports in Chinese-language financial media made such claims this week.
Country Garden had racked up debts estimated at 1.43 trillion yuan (US$196 billion) as of the end of last year.
The firm had 148 billion yuan in cash as of the end of June, but it said it intended to use that to complete unfinished housing projects whose units were sold in advance.
Falling home prices are another deterrent to homebuyers.
The value of output by China’s real-estate sector contracted 2.7 percent in the third quarter, separate data released by the bureau showed.
Output in the sector has contracted for eight of the past nine quarters, the longest slump since China established a private property market in the late 1990s.
Given its economic importance, officials have made increasing efforts to stabilize housing, with the Chinese government allowing major cities to cut down payments for homebuyers last month in one of the most significant stimulus moves tried so far.
Several other measures, such as relaxing the floor for mortgage rates on first-home purchases, have also taken effect.
However, lukewarm home sales during a recent key vacation season stirred concerns about whether the support is enough to spark a recovery.
“Looking ahead, the main risk still comes from the property sector, which is not out of the woods yet,” Macquarie Group Ltd head of China economics Larry Hu (胡偉俊) said.
Additional reporting by AFP
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