China’s new-home prices extend decline for 22nd month, but stimulus offers hope

China’s new-home prices fell for a 22nd straight month in March, but the declines continued to narrow as government support measures boosted housing transactions.

Prices of new homes in 70 mainland cities declined 0.1 per cent month on month in March, the same as February, according to data released by the National Bureau of Statistics (NBS) on Wednesday. On an annual basis, prices fell 5 per cent, improving from the 5.2 per cent year-on-year drop in February.

Second-hand home prices fell 0.2 per cent month on month in March, narrowing from the 0.3 per cent drop in February. On an annual basis, the drop was 7.3 per cent, compared with 7.5 per cent in February.

A total of 24 cities posted a month-on-month increase in new-home prices, six more than in February. Second-hand home prices rose in 10 cities, versus three the previous month.

The increase in the number of cities with rising home prices reflects a significant improvement in market confidence, according to Yan Yuejin, vice-president of Shanghai-based E-House China Real Estate Research Institute.

“A favourable policy environment for home purchases and positive home price indicators will provide greater support for the property market in the second quarter,” he said.