China's new-home prices fell the most in seven months in May, underscoring why senior government officials are renewing pledges to revive the property market.
New-home prices in 70 cities, excluding state-subsidized housing, dropped 0.22% from April, when they slid 0.12%, National Bureau of Statistics figures showed Monday. Values of used homes fell 0.5%, the sharpest decline in eight months.
The figures suggest the effects of a stimulus blitz last September is wearing off. A truce on US tariffs has done little for the world’s second-largest economy as falling prices erode corporate profits and employee incomes. That has led to suppressed demand for housing purchases, which policymakers are struggling to rekindle.
“We see China’s property downturn continuing in 2025, but with a smaller decline of property activities than in 2024,” UBS Group AG analysts led by Ning Zhang wrote in a note last week.
China's Home-Price Drop Worsens In May
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Residential sales by value declined 6.1% in May from an already low base a year earlier, according to Bloomberg calculations based on other official data released Monday. The monthly decline has exceeded 6% so far this quarter, accelerating from 0.4% in the first three months.
Real estate investment saw a deepening decline, slumping 12% on year in May, Bloomberg calculations showed. That was the steepest drop since December.
In an April survey of 2,500 respondents, UBS found elevated expectations for further property price declines. That will likely continue to dissuade homebuyers and depress market activity in the coming quarters, they cautioned.
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At a State Council meeting last Friday, Premier Li Qiang pledged action to make the real estate market “stop declining,” state broadcaster CCTV reported. When China’s top leaders first voiced such a policy target last September, a stimulus package ensued.
China’s central government will continue to coordinate existing and new fiscal and financial policies, state media reported Monday.
