Real Estate in Central China Freezes... Home Prices in 100 Cities Decline for 6 Consecutive Months

CIA "Last Month House Prices Fell 0.08%"

[Asia Economy Reporter Haeyoung Kwon] China's housing price decline accelerated last month. Despite the Chinese government's real estate stimulus measures, the housing market has not recovered due to weakening demand and a surge in COVID-19 cases.

According to major foreign media on the 2nd, the China Real Estate Research Institute China Index Academy (CIA) reported that housing prices in 100 Chinese cities fell by 0.08% year-on-year in December last year. This decline exceeded the previous month's drop of 0.06%, marking six consecutive months of falling housing prices in China.

Among the 100 cities surveyed, 68 experienced a decline in housing prices, a significant increase from 57 cities in the previous month.

Housing sales are also decreasing. According to market information firm China Real Estate Information Corporation (CRIC), the sales value of new homes by the top 100 real estate developers in China last month was 677.5 billion yuan (approximately 124 trillion won), down 30.8% year-on-year. The downward trend, which began in July 2021 (-8.3%), has continued for 18 months.

[Image source=Yonhap News]

As the real estate market rapidly cools and emerges as a risk factor for the Chinese economy, authorities have introduced various stimulus measures. They have eased long-term liquidity pressures on real estate developers and recently lifted regulations banning listed real estate companies from raising funds through stock issuance. Although real estate sentiment has recently revived, COVID-19 remains a variable. Since early last month, as quarantine authorities eased COVID-19 lockdowns, economic agents' sentiment has quickly frozen again.

The CIA forecasted, "This year, the real estate policy easing trend is expected to continue from the supply and demand perspective," adding, "The housing market will gradually stabilize."