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China New Home Prices Climb at Fastest Pace for 30 Months

Figures showed price rises across 100 cities, signalling the decline in China’s property sector may be slowing

China Evergrande
The property market ended last year with the worst declines in new home prices in nearly nine years.


China’s new home prices rose at the fastest monthly pace in more than two years and government land sales ended a 23-month slump, in a rare bit of good news for the country’s embattled property sector.

The new figures come just days after a Hong Kong court ordered the liquidation of China’s most debt-laden developer, China Evergrande more than two years after its default brought a years-long property boom to a shuddering halt.

Average prices across 100 cities grew for a fifth consecutive month in January with a month-on-month gain of 0.15%, outpacing the 0.10% increase in December, according to a survey by Chinese real estate research firm China Index Academy. 

It was the fastest rise since a 0.20% gain in August 2021. The number of cities with month-on-month price growth also stood at 49 in January, up from 47 in December.


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Separately, government revenue from land sales rose for the first time in two years in December, up 1.8% from a year earlier, according to Reuters calculations based on finance ministry data released on Thursday.

Hwabao Trust economist Nie Wen said the data showed government policies to support the real estate sector, once a pillar of the economy, could start to have an effect in 2024 after two years of steep falls.

“There is a higher probability that the sales decline in 2024 will see a marginal narrowing from the cliff-like decline in the previous two years,” Nie said.

The property market ended last year with the worst declines in new home prices in nearly nine years, with investment dropping 9.6%, roughly the same as the slide in 2022, and new construction starts plunging 20.4%, data from the National Bureau of Statistics showed.

Over the past year, the world’s second-largest economy has been introducing policies to help revive the sector and restore buying sentiment. This has helped stabilise the real estate market in some cities, but home prices, and demand, remain low in many other places.

Total sales of 100 surveyed real estate enterprises dropped 33.3% year-on-year by value in January, outstripping the decline a year earlier by 1.6 percentage points, according to a separate survey by the China Index Academy.

Sales are traditionally lower in January, as developers usually conduct promotions before the year-end to boost their numbers, but analysts said the downtrend indicates home-buying sentiment remains weak.


Evergrande’s Long Shadow

This week, two major cities, Shanghai and Suzhou, followed Guangzhou in easing home-buying curbs. A state-backed property project also received the first development loan under a so-called whitelist mechanism, according to reports in state media.

“Currently, as the easing policies in Guangzhou and Shanghai have just been announced, the effects have not yet been reflected in the transaction data,” China Index Academy said.

Market activity may pick up after the February 10 to 17 Lunar New Year holidays, according to the research firm.

Evergrande’s debt problems, however, are still casting a long shadow over the sector, analysts said.

Fitch Ratings said on Wednesday the liquidation order “is likely to be a lengthy process with high uncertainty and broader implications for creditors investing in Chinese issuers’ offshore debt and China’s property sector”.

That means homebuyers’ confidence in private developers is likely to take an even longer time to recover, with market share continuing to shift toward state-owned companies, Fitch added.

China’s official new home prices data for January, which is based on 70 cities, is due to be released on February 23.


  • Reuters with additional editing by Sean O’Meara


Read more:

China Moves to Lift Property Sector Amid Evergrande Crash Fears

Will Evergrande Really be Liquidated? Not if China Says No

Bid to Help China Property Groups Lifts Shares ‘But May Not Work’

Court Orders China Evergrande Liquidation to Pay its $300bn Debts

Country Garden Warns of ‘Severe’ Tests in China Property Market



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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