Mainland China’s home prices extend slide, adding strain to struggling property sector

Home prices in mainland China continued to decline at a rapid pace in December, posing challenges for an economy that is struggling to find new growth drivers.New home prices fell 0.4 per cent month on month on average across 70 cities, according to data from the National Bureau of Statistics (NBS) on Monday. The fall matched November’s drop and was among the steepest in more than a year.Prices slipped 3 per cent year on year in December, accelerating from a 2.8 per cent drop in November. Only six out of the 70 cities registered month-on-month gains, compared with eight in November.Downward pressure on prices remained considerable, said Li Yujia, chief researcher at the Guangdong Housing Policy Research Institute, a government-linked think tank. “Meanwhile, the broader fundamentals – especially employment and consumption – continue to weigh on households’ ability and willingness to pay, as well as expectations, making them a key constraint on any rebound.”Authorities have rolled out a series of measures to stem the fall, but with little effect. Local governments introduced more than 500 supportive measures last year, with top cities like Beijing and Shanghai easing most buying restrictions introduced during the boom years. Early this month, Chinese media reported that authorities in Tianjin told developers to rein in deep price cuts to curb falling housing prices.At the annual central economic work conference last month, policymakers pledged to stabilise the housing sector, but stopped short of issuing measures many see as crucial for its recovery.China’s real estate sector, which at its peak accounted for about a quarter of the country’s gross domestic product, has been in a prolonged downturn since late 2020. Photo: Getty Images