China’s new home prices rose for the first time since September on a monthly basis, official data for January showed on Monday, as efforts to soften the blow from tough regulatory curbs on the sector supported buyer sentiment, particularly in big cities.
Average new home prices in China’s 70 major cities rose 0.1% from a month earlier in January, compared with a 0.2% drop in December, according to Reuters calculations from data released by the National Bureau of Statistics (NBS).
China’s property market, accounting for a quarter of gross domestic product by some metrics, has slowed due to Beijing’s push to cut leverage in the sector amid defaults at heavily-indebted players such as China Evergrande Group.
To ease the pain for developers, authorities have taken a slew of measures since late 2021, including giving real estate firms easier access to funds from escrowed accounts.
The number of cities reporting price gains rose to 28 from 15 in December, driven mainly by the larger tier-one and tier-two cities.
New Housing
“In January, prices of new housing in first-tier cities changed from a month-on-month decrease of 0.1% (in December) to an increase of 0.6%, of which Beijing, Shanghai, Guangzhou and Shenzhen increased by 1.0%, 0.6%, 0.5% and 0.5%, respectively,” the NBS said in a separate statement.
The biggest gain among the four cities was seen in Guangzhou, which swung from a 0.6% decline. Shenzhen fell 0.1% in December.
Though easing measures are helping, new home prices rose at the slowest pace of 2.3% since December 2015 from a year earlier, narrowing from the 2.6% growth recorded in December.
The central government, while keeping curbs on speculative purchases and blind borrowing, is expected to roll out more measures to support buyer sentiment, which has sharply weakened due to the liquidity crisis faced by developers.
A handful of cities not constrained by regulatory restrictions on purchases are starting to relax downpayment rules for home purchases in a bid to stoke buyer interest.
“We expect more policy fine-tuning by other local governments/government entities in the next few months to counter the overall deterioration in property sales/investment sentiment,” Nomura said in a note on Friday.
- Reuters with additional editing by Sean OMeara
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