New home prices in China stayed stable in June after declining in April and May as consumers lapped up a slew of stimulus measures, including smaller down-payments and a cut in mortgage rates, as Covid curbs eased.
Average new home prices across 70 key cities were steady month-on-month, after a 0.1% drop in May and a 0.2% decline in April, according to Reuters calculations based on National Bureau of Statistics (NBS) data released on Friday showed.
From a year ago, new home prices in June fell 0.5%, the sharpest pace since September 2015, versus a 0.1% drop in May and a 0.7% rise in April.
China’s property sector, which accounts for about a quarter of the economy, is mired in a deep slump amid a string of debt defaults by developers, including China Evergrande Group, and protests from homebuyers over stalled projects.
But it has recently shown signs of improvement after lockdowns were eased and on measures aimed at ending the market chaos.
Confidence in China’s Property Market Fragile
On Thursday, regulators vowed to help local governments deliver projects on time after homebuyers threatened to stop mortgage payments on unfinished apartments.
Major homebuilder China Vanke said in June that the property market had bottomed in the short term, with a clear month-on-month rise in sales for the month.
Household loans, including mortgages, rose to 848.2 billion yuan ($125.77 billion) in June from 288.8 billion yuan in May, central bank data showed.
Among 70 cities surveyed by the NBS, 31 reported a gain in monthly price in June, more than 25 cities in May.
But analysts say confidence in China’s property market remains fragile, with consumers spooked by continued Covid flare-ups and worried about jobs.
Financial services firm Gavekal warned in a recent note that the strength and sustainability of the recent pick-up in property sales therefore remains an open question.
- Reuters with additional editing by Jim Pollard
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