China’s home prices dip in May, extending two-year stagnation
BEIJING (Reuters) -China’s new home prices fell in May, extending a two-year long stagnation, official data showed on Monday, highlighting challenges in the sector despite several rounds of policy support measures.
New home prices fell 0.2% month-on-month in May after showing no growth the previous month, according to Reuters calculations based on data released by China’s National Bureau of Statistics (NBS).
From a year earlier, prices fell 3.5% in May from a 4.0% decline the previous month.
The property sector, once a key driver of growth for the world’s second-largest economy and accounting for roughly a quarter of economic activity at its peak, holds around 70% of Chinese household wealth.
The market entered a prolonged slump in 2021, with debt-laden developers struggling to deliver homes that buyers had already paid for, further denting consumer confidence.
After policymakers announced supportive policies in recent months as Beijing braced for extended trade tensions with the U.S., positive signs have emerged in the housing market.
A private survey by property researcher China Index Academy showed the average price of new homes across 100 cities in China climbed 0.30% in May, more than doubling from a month earlier.
Some cities in China have also been easing restrictions on housing provident fund programmes for individual mortgage loans in recent weeks, as the central bank’s rate cut for the loans went into effect in early May.
Still, challenges persist. Separately, official data on Monday showed property investment fell 10.7% year-on-year, while sales by floor area dropped 2.9% in the January-May period.
At a cabinet meeting on Friday, Chinese leaders pledged to optimise policies to boost demand, improve supply, and stabilise the property market more effectively.
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