BEIJING, Oct 19 (Reuters) – China’s new home prices fell again in September, marking more than three years without a monthly or annual increase, suggesting policy support has yet to generate a broad-based recovery in housing demand.
New home prices dropped 0.1% month on month, matching the pace of decline in August, according to Reuters calculations based on data released by the National Bureau of Statistics.
On an annual basis, prices fell 2.8%, narrowing from a 3.0% drop in August, extending a decline since June 2023.
The housing market’s prolonged downturn has become one of China’s biggest economic challenges, depressing consumer confidence and local government revenues.
Prices of new and resale homes in the country’s biggest cities continued to show signs of stabilisation, likely boosted by Shanghai’s further easing of homebuying restrictions and incentives such as subsidies announced in August.
In smaller cities, however, both new and resale home prices continued to fall month on month and year on year.
In a sign that policymakers are seeking to prop up the housing market in smaller cities, the central bank and financial regulator unveiled in late September policies for subsidising mortgage interest payments for eligible homebuyers.
The policy capped the purchase price of eligible homes at 1.5 million yuan ($224,417), hardly enough to pay for even a one-bedroom apartment in a tier-one city.
Market woes continue to act as a drag on domestic demand, as many homeowners, seeing the value of their homes fall, opt to save money rather than spend.
Separate data showed property investment and home sales both contracted at a faster pace in the first nine months of the year.
($1 = 6.6840 Chinese yuan)
(Reporting by Liangping Gao, Yukun Zhang and Ryan Woo; Editing by Jacqueline Wong)
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