China’s more than year-long decline in new home prices appears to be fading, showing more signs of recovery, as Beijing seeks to boost market confidence and head off a prolonged property slump.
China’s more than year-long decline in new home prices appears to be fading, showing more signs of recovery, as Beijing seeks to boost market confidence and head off a prolonged property slump.
Prices of new commercial housing in 70 large and medium-sized Chinese cities rose 0.29 percent in February from the previous month, according to calculations by The Wall Street Journal based on data released by the National Bureau of Statistics on Thursday.
It was the first month-on-month increase in the indicator since August 2021, suggesting that the Chinese government’s efforts to support the struggling real estate sector are starting to show results. The data is another sign that China’s overall economy is improving. Affected by the “dynamic zeroing” policy, China’s economic growth slowed to 3% last year. By some estimates, the real estate sector accounts for about a quarter of China’s economic growth.
Shanghai E-House Real Estate Research Institute (E-House…
China’s more than year-long decline in new home prices appears to be fading, showing more signs of recovery, as Beijing seeks to boost market confidence and head off a prolonged property slump.
Prices of new commercial housing in 70 large and medium-sized Chinese cities rose 0.29 percent in February from the previous month, according to calculations by The Wall Street Journal based on data released by the National Bureau of Statistics on Thursday.
It was the first month-on-month increase in the indicator since August 2021, suggesting that the Chinese government’s efforts to support the struggling real estate sector are starting to show results. The data is another sign that China’s overall economy is improving. Affected by the “dynamic zeroing” policy, China’s economic growth slowed to 3% last year. By some estimates, the real estate sector accounts for about a quarter of China’s economic growth.
Yan Yuejin, research director at the E-House China R&D Institute in Shanghai, said home buyers began to regain confidence as China’s central and local governments rolled out a series of incentives and other favorable policies, supporting housing prices across the country.
Beginning late last year, the Chinese government began easing financing restrictions for cash-strapped property developers, with many Chinese cities easing restrictions on home purchases and regulators cutting mortgage rates.
Economists at Goldman Sachs, however, say that while the market may have found a bottom, at least for now, the return to stronger health is a long and variable process. The recovery in China’s property sector should be gradual and bumpy, they told clients in a note on Thursday. More favorable policies are expected in the coming months, they added.
Bruce Pang, chief Greater China economist at Jones Lang LaSalle, took a more cautious stance, saying the month-on-month rise in prices may simply reflect property developers opting to sell more high-end goods after the Lunar New Year holiday. real estate, while reducing discounts.
Pang Ming said that the key now is to see if the traditional peak season in March can continue this Xiaoyangchun, and whether it can establish upward expectations and a positive cycle, otherwise it will face greater difficulties in the beginning of the year’s stabilization and recovery.
The increase in new home prices was in line with an increase in new home sales in February. Previously, China abandoned the long-standing strict dynamic zero-clearing anti-epidemic policy, which prevented potential home buyers from showing houses on site. Home sales typically jump in the month after the Lunar New Year, as big-ticket purchases are made by recipients of big year-end bonuses.
China’s commercial housing sales rose 3.5% in January-February from a year earlier, before falling 28.3% in 2022, official data showed on Wednesday.
At the same time, real estate development investment in the first two months of 2023 fell by 5.7% year-on-year, narrowing from the 10% decline in the whole of 2022. The area of new housing starts in China from January to February fell by 9.4% year-on-year, and it will drop by 39.4% in 2022.
Of the 70 large and medium-sized cities tracked by the government, only 13 saw a month-on-month drop in sales prices of new commercial housing in February, down sharply from the 33 cities in January, official data showed on Thursday.
In February, the average price of new commercial housing in 70 large and medium-sized cities fell by 1.86% year-on-year, which was narrower than the year-on-year decline of 2.26% in January. Data show that in February, 54 of the 70 large and medium-sized cities saw a year-on-year decline in the price of new commercial housing, which was roughly the same as that of 55 cities in January.