By Liangping Gao and Ryan Woo
BEIJING (Reuters) -China’s new home prices fell at the fastest pace since May 2015 in September, official data showed on Friday, despite increased efforts to revive the struggling property sector.
In annual terms, new home prices were down 5.8% from a year earlier, deeper than a 5.3% slide in August, according to Reuters calculations based on National Bureau of Statistics (NBS) data. Reuters also reported prices fell 5.7%, which was due to an automated rounding off of figures.
New home prices were down for the 15th consecutive month, falling 0.7% month-on-month in September and matching a dip in August.
The weakness in the sector sent China’s CSI300 real estate index down nearly 3% in early trading, bucking the lift in the broader index.
China’s prolonged property downturn, which once accounted for a quarter of its economic activity, remains a major drag on the economy.
In recent weeks, China has introduced supportive measures, including lower mortgage rates, and eased home purchase restrictions, which have spurred some demand in major cities.
On Thursday, the housing authority announced plans to expand the “white list” of eligible housing projects and increase bank lending to 4 trillion yuan by year-end, in a bid to stabilise the ailing real estate sector.
Additionally, China is expected to raise 6 trillion yuan through special treasury bonds over the next three years to reinvigorate its struggling economy.
Friday’s data showed the economy grew 4.6% in the third quarter, slowing from 4.7% in the second quarter.
“The soft reading puts the annual growth target under pressure as the economy will have to post a sharp quarterly rebound of about 1.5% in the final quarter,” said economist Junyu Tan at Coface Greater China Services Limited.
Of the 70 cities surveyed by NBS, two reported year-on-year gains in prices last month.
Separate data also published on Friday showed property sales down 17.1% in January-September, compared with a 18.0% slump in January-August.
China’s real estate stocks fell after a closely watched housing policy briefing on Thursday left some investors disappointed due to lack of big fresh stimulus.
“Addressing the imbalance between too much stock and too little confidence will be key to stabilizing China’s property market,” said S&P Global Ratings in a research note on Friday.
“We estimate national property sales will decline to about 8.5 trillion-9 trillion yuan in 2024 and further to 8 trillion-8.5 trillion yuan in 2025,” said S&P Global Ratings analyst Edward Chan.
(Reporting by Ella Cao, Liangping Gao and Ryan Woo; Editing by Sam Holmes)
