New home prices in China increases in Jan by 0.1%

• New home prices increased in China by 0.1% month over month.
• New home price rises were noted in more cities in January.
• The market anticipates additional stimulus measures to increase demand.

According to official data released on Thursday, new home prices in China increased in January for the first time in a year as demand increased as a result of the end of the zero-Covid regime, favorable property regulations, and market anticipation for additional stimulus measures.

According to calculations by Reuters based on National Bureau of Statistics (NBS) data released on Thursday, new property prices increased 0.1% month-over-month in January compared to a 0.2% decline in December.

The 70 major cities that the NBS examined reported more price rises for new homes last month, with 36 reporting price hikes, up from 15 in December.

Rising property prices are considered a good indication by analysts, but they think additional stimulative policies are required to boost the current weak demand and kickstart a longer-term recovery.

Also Read

Satellite images show crowding at China’s crematoriums and burial homes

As China fights an unprecedented wave of Covid-19 infections. Satellite photos of...

The market anticipates Beijing to implement additional relaxing measures to significantly boost the industry, particularly during or after the eagerly anticipated annual parliament gathering beginning in early March.

“We believe that with the strong policy support from both the demand and financing side, the sales will start to rebound significantly from late Q2. Any early boom will be positive for the growth outlook,” said Zhou Hao, chief economist at Guotai Junan International.

The world’s second-largest economy’s once-powerful property sector has been hampered by shaky demand and growing developer loan defaults.

Since late last year, authorities have implemented a flurry of forceful stimulus policies to support the industry, including boosting property financing and enabling qualified localities to lower or eliminate the floor on mortgage rates for first-time homebuyers.

Boosted by Beijing’s Covid-19 policy U-turn in December and other supporting measures, sentiment has been improving; nonetheless, the recovery has been sporadic, with private polls showing a 20% decline in home sales by floor area from a year earlier. In the middle of February, official sales data will be made public.

In January, prices fell 1.5% from a year earlier, continuing its December rate of fall.

“The roots of the crisis in China’s property sector lie in the worsening long-term outlook for demand,” said Mark Williams, chief Asia economist at Capital Economics. “This has not improved. But sales started the year so beaten down that a short-run cyclical recovery is likely.”

Also Read

China: People can quarantine in their homes rather than facilities

In a significant softening of its zero-Covid policy, China claims that the...