Type to search

China’s New Home Prices Rise at Quickest Pace in 21 Months

Major Chinese cities have seen a rebound in home sales over the past month, as pent-up demand was unleashed after the roll back of stringent Covid curbs

People rest at a park near Beijing's central business area
The property sector, accounts for roughly a quarter of the GDP of the world’s second-largest economy. Photo: Reuters


China’s new home prices rose in March at the fastest pace in 21 months, official data showed on Saturday.

The rise suggests China’s property market is out of the doldrums amid a flurry of support form policymakers. But uncertainty remains on the strength of the momentum.

New home prices in March edged up 0.5% month-on-month after a 0.3% rise in February. That’s the fastest pace since June 2021 and the third consecutive monthly rise, based on National Bureau of Statistics (NBS) data.


Also on AF: China GDP Seen Growing 4% in Q1, Likely to Hit 5.4% in 2023


In annual terms, prices showed the smallest drop since June 2022, down 0.8% in March after a 1.2% decline in February, the 11th month of declines on an annual basis.

“The housing price index shows a trend of stabilization and recovery, fully indicating the overall real estate is out of last year’s trough,” said Yan Yuejin, an analyst at the Shanghai-based E-house China Research and Development Institution.

Strong home sales in March drove up an improvement in house prices, said Yan.


Gradual, bumpy recovery

The property sector, accounts for roughly a quarter of the GDP of the world’s second-largest economy.

The sector was hit hard last year as a regulatory crackdown on developers’ high debt levels snowballed into a financing crunch, stalling construction on housing projects. Some buyers boycotted mortgage repayments, further weakening consumer sentiment amid tough Covid restrictions.

Major cities have seen a rebound in home sales over the past month, as pent-up demand was unleashed after China abruptly rolled back Covid curbs in December.

Among 70 cities surveyed by the NBS, 64 cities saw an uptick in new home prices in monthly terms, the most cities since May 2019 and up from 55 in February.

The increase in house prices was broad-based among all city tiers which all extended their month-on-month gains.

However, analysts say it is still too early to tell whether the nascent property recovery will be sustained, because of the uncertainty over consumer confidence.

“The property sector recovery should be gradual and bumpy, due to the challenging demographic trend, still-tight financing conditions for troubled developers and policymakers’ long-held stance that ‘housing is for living in, not for speculation’,” said analysts at Goldman Sachs commenting on the data.


More room to ease policies

Last month, more than 50 cities relaxed some property rules or introduced stimulus policies, including subsidies, more housing provident funds and easing home purchase curbs.

“The biggest problem in the economy is insufficient demand with increasing deflationary pressure, the continued stabilisation of real estate is critical as recent data showing sales growth has slowed,” said Wu Jinhui, analyst at CSCI Pengyuan Credit Rating Limited.

“In the second quarter, there is room for policy relaxation on both the supply and demand side, such as a balance sheet improvement for high-quality property firms, smaller down payments and cuts in mortgage rates.”

Credit data this week suggested the growth of household medium-to-long term loans, which are mostly mortgages, accelerated in March, in line with improved property transactions.

Earlier in April, the central bank released a quarterly survey of urban depositors that showed 17.5% of respondents have plans to buy a home during the next three months, up from 16% in the previous quarterly survey.

China will release property sales and investment data for March on Tuesday, along with economic activity data and first quarter gross domestic product (GDP).


  • Reuters, with additional editing by Vishakha Saxena


Also read:

Rich Chinese Back Buying up Property in SE Asia, Australia

China Developer Sunac Posts $2 Billion 2022 Core Loss

China’s Top Developer Hit by 90% Plunge in Core Profit

No Cheer for Evergrande’s Long-Awaited Dollar Debt Revamp Plan

China Banks Hit by Rush to Pay Mortgages Off at Lower Rates


Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


AF China Bond