China’s housing prices declined for 13 consecutive months until September as the country’s real estate crisis posed a big economic challenge to Xi Jinping and his new cabinets in the next five-year term.
Bloomberg cited China’s National Bureau of Statistics data, showing that new-home prices in 70 cities fell 0.28% in September.
In addition, based on Bloomberg calculations, home sales dropped 15% in September year on year compared with a 21% decline in August.
Chinese authorities have introduced multiple measures to support the troubled property market. They offer lower mortgage rates and down payments for homebuyers, special loans, and funding support for developers from banks. However, the market remains fragile, primarily due to the Zero-COVID policy and liquidity crunch.
Hope for more rescue efforts from the regime seems dim as Xi did not mention a few signals in his speech during last week’s congress.
A recent survey showed that 73% of Chinese households expect home prices to remain unchanged or decrease in the short term, reflecting weakening consumer confidence in the market.
In late June, mortgage boycotts spread across China as developers failed to deliver committed houses to homebuyers due to fund shortages.
According to Nikkei Asia, homebuyers are now scared of buying a new house. One resident in Zhengzhou city, the spotlight of the boycott turmoil, Ma Lin, told Nikkei Asia, “I’d be too scared to buy pre-sale property if I’m going to buy another home.”
Lack of confidence in pre-sale homes caused pre-owned home sales to surpass new-home sales by floor area in August in China. New-home sales by region fell 40% year on year, while pre-owned houses surged over 50% during National Day break.