Home prices in major Chinese cities continued to decline in September and second-hand home prices dropped month-on-month across all of the cities, according to data released by the National Bureau of Statistics.
In September, the average new home prices and second-hand home price in the 70 cities fell by 0.7% and 0.9% month-on-month, respectively, unchanged from the declines in the previous month, showed calculations based on the NBS data.
New home prices in first-tier cities fell 0.5% in September from a month earlier, widening by 0.2 percentage points from August, with prices in Beijing, Guangzhou, and Shenzhen falling 0.7%, 0.9%, and 1%, respectively, while Shanghai rising 0.6%.
In second-tier cities, new home prices fell by 0.7% in September from the prior month, in line with the drop in August and the prices in third-tier cities also fell 0.7%, narrowing by 0.4 percentage points.
Second-hand home prices in first-tier cities fell by 1.2% month-on-month in September, expanding by 0.3 percentage points from the prior month, with prices in Beijing, Shanghai, Guangzhou, and Shenzhen falling 1.3%, 1.2%, 1.1%, and 1.3%, respectively.
In second-tier cities, second-hand home prices fell by 0.9%, narrowing by 0.1 percentage points, and in third-tier cities, prices also fell by 0.9%, the same rate as in the previous month.
The number of cities posting price declines remained at historical high. In September, 66 of the 70 cities saw new home price drop month-on-month, versus 67 in August, however, all of the 70 cities saw second-hand home prices decline, up from 69 in the previous month.
Property sales volume remained at a historical low, with unsold home inventory increasing further. According to the NBS, new property sales, in terms of floor area, reached 70.3 million square meters in the January – September period, sliding 17.1% from a year earlier, with residential home sales falling by 19.2%.
Meanwhile, the total unsold properties, in floor area, stood at 732 million square meters as of the end of September, an increase of 13.4% year-on-year, remaining at a historical high and well above an average of 598 million square meters over the past ten years.
The real estate market in core cities has shown signs of stabilization, with residents’ confidence recovering, and as relevant policies continue to take effect, property sales in October are expected to show significant improvement, said Xu Yuejin, deputy director of research at the China Index Academy.
In the fourth quarter, after a comprehensive set of supportive policies are implemented, both transaction volume and prices in core cities may stabilize and bottom out, he added.
“Since late September, the central government has introduced a package of new policies, which have significantly boosted market confidence. Some policies have already been implemented, and their effects are gradually being seen. Other policies are still being rolled out, and it will take time for their full impact to be realized,” said Sheng Laiyun, deputy director of the NBS, at a press conference.
“Based on the recent changes in expectations among real estate professionals and the actual sales situation during the ‘Golden Week’ holiday, we have reason to be optimistic about the future trend of the real estate market,” Sheng said.
He anoted that the NBS recently conducted a survey of real estate developers and intermediary agencies in 70 major cities, which showed that the proportion of new home workers who expressed optimism about their business in September increased by 10 percentage points month-on-month, while those engaged in second-hand homes saw a 6.5 percentage point increase.