China’s new home prices saw a slight increase in September, ending a four-month decline, according to data from China Index Academy. The average prices rose by 0.05% from the previous month, with only 30 out of 100 cities surveyed reporting a fall in new home prices. This growth can be attributed to developers accelerating the launch of new housing projects to take advantage of recent support measures implemented by the government. Confidence in the property sector, which plays a significant role in China’s economy, has been shaken due to Beijing’s crackdown on developer debt accumulation. The recent measures aimed at boosting home-buying sentiment have had a positive impact on major cities, but concerns remain about the long-term sustainability of the demand, especially in smaller cities.
The report also highlights that the increase in new home sales is driven by developers launching higher quality housing projects. If these policies continue to be optimized, it is expected that the property market in first-tier cities will stabilize in the current quarter, while recovery in smaller cities might take longer. The property sector represents a significant portion of China’s economic activity and any disruptions can have a ripple effect on the overall economy. Therefore, the government’s focus on implementing supportive measures and restoring confidence in the sector is crucial for ensuring stability and sustainable growth.
However, despite the recent improvement in new home prices, the property market still faces challenges. China Evergrande Group, the world’s most indebted property developer, with over $300 billion in liabilities, recently announced that its founder is being investigated over suspected crimes. This development further adds to the concerns surrounding the property sector and highlights the need for ongoing regulation and stability in the market.
