Prices of New Homes in China Rise at Faster Pace in November
Prices of new homes in China rose at a faster pace in November, according to a private survey. The average price across 100 cities edged up 0.36% compared to the previous month’s 0.29%, according to data released by the China Index Academy. On a year-on-year basis, the average price rose 2.40%, exceeding the 2.08% growth in October.
This news comes as a series of policies are being implemented to support the ailing property market, which has been a significant drag on the world’s second-largest economy. The government has been stepping up efforts to boost sentiment, enhance affordability, and loosen home purchase restrictions, including tax breaks and smaller down payments.
The property market, which accounted for roughly a quarter of economic activity at its 2021 peak, remains a key concern. However, a Reuters poll expects home prices to fall at a slower pace this year and next, then stabilize in 2026, as the support measures start to bear fruit.
According to Fitch’s managing director of Asia-Pacific corporate ratings, Ying Wang, the new and second-hand housing market has shown some signs of improvement since the release of real estate policies at the end of September, but sustainability is highly uncertain. Wang predicts that home prices are likely to continue to fall until corporate earnings in the real economy improve, leading to increased employment and outlook for resident incomes. Fitch maintains its negative credit outlook on China’s real estate market through 2025.
