Caixin
Dec 16, 2019 01:44 PM
ECONOMY

Home-Price Growth in China Slowest in Almost Two Years

A man looks out from an opening in a wall as residential buildings stand in the distance in the Jiading district of Shangha, on April 11, 2016. Photo: Bloomberg
A man looks out from an opening in a wall as residential buildings stand in the distance in the Jiading district of Shangha, on April 11, 2016. Photo: Bloomberg

(Bloomberg) — China’s home-price growth slowed for a sixth straight month in November, with developers offering deeper discounts in a lackluster market.

New-home prices, excluding state-subsidized housing, rose just 0.3% last month from October in 70 major cities, National Bureau of Statistics data showed Monday. That’s the slowest gain since February 2018.

Twenty-one cities reported a drop in values, the most in almost four years. The most evident decline was in second-tier cities, mainly regional economic hubs, even as some of those centers made it easier for people to obtain highly sought-after residency permits, which have the potential to spur sales.

Developers may have to cut prices even further to meet sales targets set at the beginning of the year. Buyer sentiment has deteriorated, with transactions last month slipping 1% from October after a 37% surge in supply, China Real Estate Information Corp. data show

The focus is shifting to whether policy makersmight ease property curbs and loosen financing restrictions on home builders. At the Communist Party’s annual economic planning meeting last week, goals for the housing market next year weren’t explicitly stated

Some economists, including those at Goldman Sachs Group Inc., forecast authorities may have become “slightly less hawkish” regarding concerns about property sector over-tightening. However they say a full-scale easing is unlikely.

“Economic factors are likely compelling Beijing to adjust its overly hawkish stance on the property sector,” Lu Ting, the chief China economist at Nomura International (HK) Ltd., wrote before the data release.

Home sales and builders’ investment in property development both recorded smaller increases in November, a separate data release Monday showed.

The worst may be yet to come. A leading indicator on property development — developers’ new starts — declined from a month earlier for the first time in 25 months.

Contact editor Yang Ge (geyang@caixin.com)

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