China new home prices down less in Dec on promotions, easing curbs

Beijing, Jan. 15 (BNA): New home prices in China fell more slowly in December than the previous month, official data showed on Saturday, as marginal easing of financing restrictions and promotions by property developers helped stabilize demand.

Average new home prices in China’s 70 major cities fell 0.2% in December from the previous month, slower than the 0.3% decline in November, according to Reuters calculations from data from the National Bureau of Statistics (NBS).

China’s property market has slowed since June 2021 as regulators ramped up their deleveraging campaign against the bloated sector, leading to defaults at some debt-laden companies, Reuters reported.

But the decline is moderating as authorities and property developers in multiple cities took measures in December to boost home sales, with local governments offering subsidies to buyers and real estate firms offering discounts. Read more

Monthly prices were up in 15 of the 70 cities, compared to nine cities that posted price gains in November.

“The real estate market is gradually approaching its lows as the credit tight period ends,” said Zhang Daoyi, senior analyst at real estate agency Centalin. He said first and second tier cities would be the first to emerge from the downturn.

New home prices rose 2.6% year-on-year in December, slower than the 3.0% growth recorded in November.

In a recent note, Oxford Economics analysts said they expect central and local authorities to take steps to contain the risk of default by property developers, such as increasing credit to the sector and adjusting the strict “three red lines” policy introduced to limit borrowing by developers. .

The repayment extension granted by bondholders to embattled developer China Evergrande Group (3333.HK) came as authorities increasingly stress the need to maintain economic stability.

Yan Yujen, director of research at Shanghai-based China Research and Development Institute E-house, said he expects property policies to continue to soften in the first quarter given the significant economic impact of the real estate market.

“The December data is a positive sign, indicating that home prices have not fallen further.”

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