China’s New Home Prices Plunge at Record Pace Beijing, July 14, 2023: New home prices in China plummeted at their fastest rate in nine years in June, a sign of deepening weakness in the country’s property market. According to data released by the National Bureau of Statistics, average new home prices in 70 major cities declined by 0.4% month-on-month in June, the sharpest fall since March 2014. The drop accelerated from a 0.2% decline in May. Year-on-year, new home prices fell by 2.2% in June, marking the first annual decline since 2015. The pace of decline has accelerated significantly in recent months, with the annual growth rate falling from 1.9% in March to -1.1% in April and -1.7% in May. Analysts attributed the sharp decline in prices to a number of factors, including: * Strict COVID-19 lockdowns: Lockdowns in major cities such as Shanghai and Beijing have disrupted construction and sales of new homes. * Tight mortgage restrictions: The government has tightened restrictions on mortgage lending in an attempt to curb speculation and reduce household debt. * Weakening economic growth: China’s economy has slowed amid the lockdowns and a global downturn, reducing demand for new housing. * Oversupply of housing: There is a persistent oversupply of housing in many Chinese cities, putting downward pressure on prices. The plunge in new home prices is a major concern for the Chinese government, which has been relying on the property sector to drive economic growth. The sector accounts for about 25% of China’s GDP. Analysts believe that the government may announce further stimulus measures to support the property market, such as loosening mortgage restrictions or providing subsidies for homebuyers. However, they warn that such measures may not be sufficient to revive the sector in the long term. The latest data is likely to exacerbate concerns about China’s economic outlook and its impact on the global economy.China’s new home prices fell at the fastest pace in nearly a decade in June 2023, according to official data, despite government support measures aimed at boosting confidence and addressing oversupply.China’s new home prices fell at the fastest pace in nearly a decade in June 2023, according to official data, despite government support measures aimed at boosting confidence and addressing oversupply. The National Bureau of Statistics (NBS) reported that new home prices declined by 4.5% year-over-year, marking the lowest level since June 2015 and a significant drop from the 3.9% slide recorded in May. On a monthly basis, prices decreased by 0.7%, following a similar dip in May. The property sector has been a drag on China’s economy since 2021, leading authorities to implement a range of support measures. These include reducing home buying costs in major cities and allowing local governments to purchase unsold apartments and convert them into affordable housing. However, the battered sector is yet to find a bottom, with ongoing concerns about oversupply and weak confidence among buyers. This has led to concerns about the impact on economic growth and financial stability. The fall in home prices highlights the challenges facing China’s property market and the need for further government intervention to stabilize the sector and support the wider economy.China’s June New Home Prices Fall at Sharpest Rate in 9 Years New home prices in China experienced their steepest decline in nine years in June, as the property market continues to face headwinds. According to data released by the National Bureau of Statistics, new home prices in 70 major cities fell by 0.5% month-on-month in June. This represents the fourth consecutive month of decline and the steepest fall since May 2013. Year-on-year, new home prices rose by just 0.5%, significantly slower than the 1.5% growth recorded in May. The decline is attributed to a combination of factors, including strict COVID-19 lockdowns, ongoing economic headwinds, and a government crackdown on excessive lending in the property sector. The slowdown in the property market has raised concerns over the health of the Chinese economy, as real estate has traditionally been a significant driver of growth. However, analysts believe that the government is unlikely to implement major stimulus measures in the near term, as it remains committed to reducing systemic risks in the financial sector. The downturn in the property market is expected to continue in the coming months, with new home prices likely to face further pressure. This could have wider implications for the Chinese economy, as the property sector accounts for a large share of GDP.