China’s new home prices in January recorded a month-on-month increase for the first time since September 2021, official data showed on Monday, as both the government and the lenders implement measures to boost property sales.
Sheng Guoqing, chief statistician from the urban department of China’s National Bureau of Statistics (NBS), said in January, new home prices in China’s 70 major cities reversed a month-on-month decline of 0.1 percent in December to an increase of 0.6 percent, of which Beijing and Shanghai rose 1 percent and 0.6 percent, respectively.
Prices for secondhand homes increased 0.1 percent in January from December, with Beijing and Shanghai rising 0.5 percent and 0.6 percent, respectively, Sheng said.
According to the NBS, among the 70 large and medium-sized cities, 39 saw new homes prices fall in January, 11 fewer than last month; while 55 cities recorded a price drop for secondhand homes, eight fewer than December.
“This reflects that the government’s stimulating policies in the fourth quarter of last year, especially easier mortgage policy, has worked to curb the decline of house prices,” Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Monday.
Since September, China’s property market has faced downward pressure, resulting from debt defaults by heavily-indebted property developer Evergrande Group and other developers, triggering public concern over market conditions.
In order to stabilize the property market, the authorities have taken a series of measures to ease financing restraints including accelerating merger and acquisition among debt-ridden real estate developers.
In addition, China’s central bank moved to cut the one-year benchmark loan prime rate (LPR) on December 20 after releasing 1 trillion yuan ($158.05 billion) extra liquidity to the country’s financial system.
During the Spring Festival, some Chinese cities have moved to cut the down payment ratio for home buyers. Real estate agencies in Southwest China’s Chongqing have claimed that a number of local banks have reduced the down payment ratio for home loans to 20 percent for buyers with no mortgage history during the Spring Festival, following a similar cut for the down payment ratio for home loans in Heze, East China’s Shandong Province and Ganzhou, East China’s Jiangxi Province.
“NBS’s data, together with local banks’ recent performance showed continuous easing of mortgage policies, which will largely lower the threshold for home purchases, helping activate property market transactions,” Yan said.
Residents select houses at a sales center of a real estate company in Huaian, East China’s Jiangsu Province on Sunday. As China’s domestic coronavirus control has made progress, local real estate companies have opened while observing strict measures against the virus. Photo: cnsphotos
