Breaking News
Investing Pro 0
Free Webinar - Crude Oil Trading 2023 | Thursday, February 9, 2023 | 01:00PM PST Enroll Now

China's new home prices fall for second month on weak sentiment

Economy Oct 24, 2022 01:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Residential buildings are pictured near a construction site in Beijing, China April 14, 2022. Picture taken April 14, 2022. REUTERS/Tingshu Wang 2/2
 
GS
+0.19%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Liangping Gao and Ryan Woo

BEIJING (Reuters) -China's September new home prices fell for the second straight month as mortgage boycotts, a heightened debt crisis and COVID-19 curbs weighed on homebuyers' sentiment.

China's property sector has been beset by multiple headwinds after regulators clamped down on excessive borrowing since mid-2020. Problems have deepened from the liquidity crunch, with debt-ridden developers defaulting on bond payments, homebuyers halting their mortgage payments on stalled projects and pandemic restrictions continuing to undermine demand.

Beijing has rolled out a flurry of policies to revive the sector, including relaxing mortgage rates and refunding individual income tax for some homebuyers. But demand has yet to recover, with a decline in developer sales and investment underscoring the bleak outlook.

"China's property market remains sluggish and is expected to stabilise in the fourth quarter, but still hovering at a low level," said Zhang Dawei, chief analyst at property agency Centaline.

The property market has been affected by falling confidence over the economic outlook, especially as cash-strapped developers halted construction on many projects, Zhang said.

New home prices in September fell 0.2% month-on-month after a 0.3% drop in August, according to Reuters calculations based on National Bureau of Statistics (NBS) data released on Monday.

On a year-on-year basis, new home prices in September declined at the fastest pace since August 2015, falling 1.5% after a 1.3% decline in August.

WEAK CITIES

Out of the 70 cities surveyed by NBS, 54 reported price falls in September, up from 50 cities in August.

In monthly terms, new home prices in tier-two cities fell 0.2% and declined 0.4% in tier-three cities.

"The property markets in lower-tier cities still face strong headwinds from weaker growth fundamentals than large cities, including net population outflows and potential oversupply problems," said Goldman Sachs (NYSE:GS) in a research note.

Separate data from the statistics bureau also showed the sector remained in a protracted slump, with developers struggling with weak demand.

Property sales by floor area in September declined for a 14th consecutive month in September, down 16.15% on year from a slump of 22.58% in August, according to Reuters calculations based on official data.

Property investment fell 12.1% from a year earlier, slightly narrowing from a 13.8% fall in August.

POLICY

China wrapped up its twice-a-decade leadership reshuffle on Sunday, with Xi Jinping securing a third term as general secretary of the ruling Communist Party and packing the new Politburo Standing Committee with allies.

China reiterated its "housing is for living, but not for speculation" in the full work report of the Communist Party Congress.

Analysts said they did not expect big policy changes after the Congress.

"There is little room to give more help to real estate property developers as doing so will risk the credibility of government reform (for property developers, that means the deleveraging reform)," said Iris Pang, chief economist for Greater China at ING.

"There could be some targeted policy to help mortgagors that bought uncompleted projects but they should not be considered preferential policies for real estate developers."

China's new home prices fall for second month on weak sentiment
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email