China’s new-home prices fell at the fastest rate in nine years last month

Official data reveals that China's new-home prices experienced their fastest decline in nine years last month, according to Reuters. 

They fell 0.7% in May compared to the previous month, as calculated by Reuters from figures released by China’s National Bureau of Statistics.

This marked the 11th consecutive month-on-month decrease and the sharpest drop since October 2014, despite governmental efforts to reduce oversupply and assist heavily indebted developers. The May figures showed a 3.9% year-on-year decline, Reuters noted.

China's property sector has been a key driver of economic growth, but a crisis began to unfold in 2021 when government measures exposed unsustainable debts held by major developers like Country Garden, Evergrande, and Vanke.

These developers were left unable to complete housing projects with pre-sold apartments, leading to mortgage boycotts from frustrated buyers.

Authorities have attempted to stabilize the sector with a $41 billion support package, but analysts are skeptical about its sufficiency to address the massive oversupply of homes and declining demand.

"The latest policies have boosted the second-hand home market in major cities, but the liquidity problem of real estate companies has not yet been resolved, and the confidence crisis in the new-home market persists," Xu Tianchen, senior economist at the Economist Intelligence Unit, told Reuters.

Source: www.globalconstructionreview.com