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China's new home prices recorded a quicker month-on-month increase in November, reflecting selective improvement in the primary housing market. However, secondary-market prices continued to fall as high listing volumes and weak buyer sentiment kept pressure on valuations. The survey by China Index Academy highlighted that the broader property sector remains under strain, with developers still coping with the liquidity challenges that began in 2021. Although several supportive steps were introduced in the second half of 2024, major new stimulus has not been introduced this year. Policymakers may consider easing purchase rules and reducing transaction costs to stabilise demand.
China's new home prices increased at a slightly stronger pace in November, even as the resale housing segment continued to show weakness, reflecting ongoing difficulties in the country's real estate sector. A private survey released this past week by China Index Academy, one of the country's largest property research institutions, reported that new home prices rose 0.37% month-on-month, up from a 0.28% rise recorded the previous month. Advertisement
In contrast, resale prices extended their downward trend, declining 0.94% after a 0.84% drop in the previous month. The research firm noted that the large number of listings and muted buyer sentiment in the secondary market added further pressure on prices as the year approached its close.
China's property sector has been under significant strain since regulatory tightening led to a widespread liquidity crunch for developers in 2021. Several major companies have defaulted on debt since then, and the sector has not yet shown clear signs of a sustained recovery. Policymakers have emphasised that stabilising the market is essential for supporting household spending, especially as the broader economy continues to rely heavily on state-led infrastructure investment. Export performance has also been affected due to ongoing U.S. trade measures.
Supportive measures were announced in the latter half of 2024, but authorities have largely refrained from introducing broader stimulus this year. According to China Index Academy, near-term steps if implemented may include loosening restrictions on home purchases, reducing transaction-related charges, and speeding up redevelopment of urban village areas to boost demand and improve market confidence.
Source Reuters
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