China’s home prices slide further in November as authorities vow to stabilise sector

Home prices in mainland China continued to decline at a rapid pace in November, posing challenges for policymakers who have vowed to stem a years-long downturn.\nNew home prices fell 0.4 per cent month on month on average across 70 cities, according to data from the National Bureau of Statistics (NBS) on Monday. The decline eased slightly from a 0.5 per cent fall in October, but it was among the steepest in more than a year.\nPrices slipped 2.8 per cent year on year in November, compared with a 2.6 per cent drop in October.\nOnly 11 out of the 70 cities registered month-on-month gains, compared with six in October.\n\n\nAuthorities have rolled out a series of measures to stem the fall, but to little effect. Local governments at different levels have issued more than 500 supportive measures this year, with top cities like Beijing and Shanghai scrapping most buying restrictions introduced during the boom years to curb soaring prices.\nAt the annual central economic work conference last week, policymakers vowed to stabilise the housing sector, but stopped short of introducing measures many see as vital for its recovery.\n“The central economic work conference explicitly prioritised stabilising the property market, signalling that current policies to steady home prices and market conditions need to be stepped up and deliver results as soon as possible,” said Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, a government-linked think tank.\nPrimary home prices in the four tier-one cities, which are more economically developed and typically have higher housing demand, fell 0.5 per cent last month, accelerating from a 0.3 per cent fall in October.\nShanghai was the only tier-one city to post a monthly gain, with prices rising 0.1 per cent from October. Meanwhile, prices in Beijing and Guangzhou both fell 0.5 per cent, while those in Shenzhen dropped 0.9 per cent.\nNew home prices in tier-two and tier-three cities fell 0.3 per cent and 0.4 per cent, respectively, slightly narrowing from the previous month.\nChina’s real estate sector, which contributed to about a quarter of the country’s gross domestic product at its peak, has been on a downward spiral since late 2020, when Beijing implemented the “three red lines” campaign that tightened financing for developers in an effort to cool a red-hot market.\nAs developers encountered liquidity strains, they struggled to complete pre-sold homes and repay debts. As homebuyers lost confidence, sales fell, exacerbating the pressure on the sector. In 2024, China’s top 100 developers sold homes worth 4.4 trillion yuan (US$620 billion), 38 per cent of 2020 levels, according to data from China Index Academy, the mainland’s largest independent real estate research institution.\nChina Evergrande, once the mainland’s largest developer by sales, defaulted on its offshore bonds in December 2021, sparking global concerns about the spread of the contagion from China’s housing downturn.\nThe housing downturn has affected everything from employment to consumption. China’s youth unemployment remained high at 17 per cent in October. Retail sales, a key indicator of household spending, recorded their slowest growth in over two years in November, rising 1.3 per cent compared with the same month last year, according to NBS data.\nAnalysts expect at least another two years of declining sales and falling prices in the housing sector.\nOn the secondary housing market, prices in November fell by the most in more than a year. They dropped 0.7 per cent month on month, the highest in 14 months, and 5.7 per cent year on year.\nTier-one cities saw the steepest monthly drop at 1.1 per cent, accelerating from 1 per cent the previous month.\n