(Bloomberg) — China’s home prices fell for a ninth month in May, signaling demand remains weak despite increased government support for the slumping property market.
New home prices in 70 cities, excluding state-subsidized housing, dropped 0.17% last month from April, when they slid 0.3%, National Bureau of Statistics figures showed Thursday.
The figures suggest that China’s real estate sector is far from a rebound amid a worsening job crisis and weak economic recovery. Chinese households have turned to hoarding cash this year, a sign that people are bracing for tougher times even as some cities emerge from crippling Covid lockdowns.
Chinese officials have been stepping up efforts to arrest a property slowdown that has weighed on the world’s second-largest economy for almost a year. These include urging banks to lend more, easing mortgage costs and partially relaxing ownership rules.
“Whether the easing measures can take effect remains to be seen,” China Real Estate Information Corp. researchers led by Yang Kewei wrote in a note earlier this week. “The majority of developers haven’t seen a full sales recovery.”
Wenzhou, an eastern Chinese city with a population of nearly 10 million where home values declined for four months, has started to allow first-time homebuyers to only repay mortgage interest for the first three years, according to its official WeChat account.
There have been some early signs that the market may be bottoming. New-home sales rose 26% from April, the first month-on-month gain since December, bureau data showed Wednesday. However, the stop-start reopening from Covid lockdowns may be too late to save some cash-strapped property developers.
Existing-home prices declined 0.39% from a month earlier, the largest drop since February 2015.
(Updates with Wenzhou’s relief for first-time homebuyers in sixth paragraph)
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