China’s new home prices rise for 4th month, but pace slows

China‘s housing market experienced a fourth consecutive month of growth in April, albeit at a slightly reduced pace, as the government‘s efforts to stabilise the sector continue to boost sentiment following the country’s rapid recovery from Covid-19 restrictions. New home prices in April increased by 0.4% month-on-month, compared to a 0.5% rise in March, based on Reuters calculations using data from the National Bureau of Statistics (NBS).

However, the slower rate of home price growth in April, along with recent data indicating a significant drop in property investment and sales, raises concerns about the robustness of the sector’s recovery, which is vital to the overall health of China’s economy. Year-on-year, prices decreased by 0.2%, marking the 12th consecutive month of decline in annual terms. In comparison, prices fell by 0.8% in March.

Since November, Beijing’s assertive stimulus policies targeting the property sector have improved sentiment. Nevertheless, uncertainty regarding the strength of the revival remains, given the uneven nature of the broader economic recovery. As part of a wider effort to help the economy rebound from the pandemic, an increasing number of Chinese cities have implemented support measures or eased regulations for first-time home buyers.

In addition, last week, China’s housing regulator issued a notice requiring local real estate brokers to lower fees for housing transactions and leasing services to encourage the healthy development of the sector.

Medium-to-long-term loans extended to households, primarily mortgages, fell by 115.6 billion yuan (US$16.72 billion) in April, according to a credit data breakdown released on Thursday, reports Channel News Asia.