Despite Easing Real Estate Restrictions, China Sees Steeper Drop in Home Prices in September

Even First-Tier Cities Like Beijing and Shanghai Struggle to Cope

Photo related to Chinese real estate. Not directly related to the article.

Although major Chinese cities have introduced easing measures to boost the real estate market, the decline in housing prices accelerated in September, according to reports from Bloomberg and Reuters on October 20 (local time).

According to the National Bureau of Statistics of China, new home prices in 70 major cities fell by 0.41% compared to the previous month, marking the largest drop in 11 months. This decline is steeper than the 0.3% decrease recorded in August.

During the same period, prices of existing homes (resales) dropped by 0.64%, the largest decline in the past year.

The real estate slump, now in its fourth year, continues to weigh on the broader Chinese economy. China’s third-quarter gross domestic product (GDP) growth rate, released on this day, was only 4.8% due to sluggish domestic demand and other factors. This figure is lower than the first quarter (5.4%) and the second quarter (5.2%), and it also falls short of the annual target (5%).

Kelvin Lam, Chief Economist at Pantheon Macroeconomics, analyzed, "It will be difficult for housing prices to recover before 2027, when inventory levels return to a reasonable range."

In August, major Chinese cities such as Beijing and Shanghai eased restrictions on home purchases in suburban areas, with Shenzhen implementing similar measures. Even first-tier cities are now stepping up efforts to address the growing housing inventory burden in their outskirts. Suburban areas account for about 70% of all new home transactions.