China’s new house prices declined at the fastest pace in seven years in October, reflecting the deepening crisis that prompted authorities to bail out the troubled sector a couple of days earlier. 

According to Bloomberg calculation based on China’s National Bureau of Statistics, the country’s new-home prices fell 0.37% last month from September, declining 14 months in a row. The existing-home market performed even worse, dropping 0.47%, the lowest since 2014. 

Last month, housing sales fell 23% from a year earlier, sharply down from a 16% decline in the previous month. Property investment also worsened, falling 16%. 

As part of rescue efforts, China unveiled the most extensive package on Sunday, November 13, to bail out the property market.

Citing sources familiar with the matter, Bloomberg revealed that the sweeping package includes 16 measures. They would help local developers handle their liquidity crisis and loosen down-payment requirements for homebuyers, among others.

China’s banking and insurance agency announced on Monday that it would allow real estate developers to access some presale funds.

The ongoing property crisis is the key hindrance for the Chinese economy.  

But analysts raised concerns that the bail-out measures could not be effective as these methods did not target the core problem of the ongoing crisis, a weakening demand. They also viewed that the sector recovery is likely to be bumpy as shown in latest data.

Zhang Dawei, chief analyst at property agency Centaline told Reuters, “It should be noted that the current problem facing the real estate industry is no longer just for property, but more of economic income expectations.”  

He added, “In the short term, the property market will remain in the doldrums in the fourth quarter.”

Reuters cited Goldman Sachs analysts’ note on Wednesday, saying, “Considering the protracted disruptions from dynamic zero-Covid policy, falling and unbalanced demographic demand, and policymakers’ long-held stance that ‘housing is for living in, not for speculation’, we maintain our view that the property sector recovery should be gradual and bumpy,”

Sign up to receive our latest news!

By submitting this form, I agree to the terms.