China new home prices grow slightly faster in October, private survey shows

BEIJING: Prices of new homes in China rose at a faster pace in October, traditionally a peak season for house hunting, a private survey showed on Friday (Nov 1), suggesting that recent support measures could be having some early impact in a crisis-hit market.
The average price across 100 cities edged up 0.29 per cent, compared with the previous month’s 0.14 per cent, according to data released by property researcher China Index Academy.
On a year-on-year basis, the average price rose 2.08 per cent versus 1.85 per cent growth in September.
The property market, once accounting for roughly a quarter of economic activity, is grappling with a prolonged downturn since 2021 and remains a major drag on the world’s second-largest economy.
Authorities rolled out a raft of property easing measures at the end of September, including a cut in the minimum down payment ratio to 15 per cent for all housing categories and relaxation in home purchase restrictions.
The stimulus measures appear to have given a lift to the industry in some major cities. The survey showed mega city Shanghai recorded the largest month-on-month house price increase of 1.09 per cent.
However, the small cities continue to languish, underscoring cautious buyer sentiment that has chilled the real estate market in recent years.
Average new home prices fell 0.02 per cent from a month earlier in smaller cities last month, the China Index Academy data showed.
New homes sold by value fell 34.7 per cent year-on-year in January-October, though they rose 10.53 per cent in October, according to a separate survey released by the academy a day earlier.
“The surge in top-tier cities may merely be the result of pent-up demand in response to those easing measures. Such demand is unlikely to be sustainable, as evidenced by cases of short-lived recoveries over the past two years,” said economists at Nomura in a research note earlier this week.
“Ensuring the delivery of pre-sold homes is key to reversing the property slump, especially in low-tier cities … direct funding support from Beijing will be much more effective,” said Nomura.