Home Prices Slide Amid Chinese Real Estate Troubles
May 20, 2022
The prices of new homes in China fell for the first time in more than six years, as Beijing’s regulatory crackdown continues to weigh on one of the nation’s biggest economic drivers.
Average new-home prices in 70 major cities were 0.11% lower in April from a year earlier, according to a Wall Street Journal analysis of data released by China’s National Bureau of Statistics. Year-over-year prices increased 0.66% in the month prior.
Though the decline was slight, it marks the first decrease since November 2015 when China was in the midst of a pronounced economic slowdown.
While this is the first annual decline since 2015, on a month-to-month basis prices have decreased for eight consecutive months. Prices were down 0.3% in April, an acceleration from March’s 0.07% monthly decline.
The Wall Street Journal posits that “the numbers suggest that the efforts taken so far by Chinese officials to halt the bleeding in the sector have yet to stir home buying across the country.”
China’s property sector, which is estimated to account for more than a quarter of the country’s total economic output, has been slowing since last year when Beijing cracked down on housing speculation and curbed borrowing for the nation’s debt-laden developers.
Chinese officials have attempted to spur homebuying by issuing subsidies and lowering mortgage rates, but buyer confidence remains low.
The property sector has also taken a hit from China’s handling of coronavirus outbreaks, which have seen large swathes of the country put under strict lockdown, keeping prospective buyers from shopping, slowing construction, and depressing consumer sentiment.