China’s May new home-price index defies rescue, chalks up biggest fall in nearly 10 years

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Prices of new homes in 70 medium and large cities fell 0.7 per cent month on month in May, the most since a 0.8 per cent decline in October 2014

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Buyers in China’s property market are still reluctant to enter the market. Photo: Bloomberg

Yulu Ao

Published: 1:32pm, 17 Jun 2024Updated: 2:34pm, 17 Jun 2024

New home prices in China extended a decline in May, falling by the most in nearly 10 years as a massive rescue package has yet to make an impact.

Prices of new homes in 70 medium and large cities fell 0.7 per cent month on month in May, the steepest since declining 0.8 per cent in October 2014, according to data published by the National Bureau of Statistics on Monday. On a year-on-year basis, prices slumped 4.3 per cent.

On the primary market, prices fell in 68 of the 70 cities surveyed by the government, versus 64 in April, the data showed. On the secondary market, prices fell in all 70 cities, versus 69 in April.

New home prices in tier-1 Chinese cities fell 0.7 per cent month on month in May, widening from the 0.6 per cent decline in April. In Beijing, Guangzhou and Shenzhen, the price retreat ranged between 0.8 per cent and 1.4 per cent. Prices, however, rose 0.6 per cent in Shanghai.

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The disappointing data comes a fortnight after Beijing announced ambitious plans to rescue the sector, including a 300 billion yuan (US$41.3 billion) relending facility to help local governments buy unsold homes from distressed developers to clear excess housing inventory and shore up the market.