New home prices in April fell for the first time since December after being bitten by COVID

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Beijing — China’s new home prices in April fell month-on-month for the first time since December. Official data was shown on Wednesday. It was depressed by fragile demand in small cities and a strict and widespread blockade of COVID-19.

Average new home prices in 70 major cities fell 0.2% month-on-month compared to March’s zero growth, according to Reuters calculations based on April data from the National Statistics Bureau (NBS).

New home prices rose 0.7% year-on-year, the slowest pace since October 2015, easing from a 1.5% rise in March.

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The outlook for the Chinese real estate market has been bleak in recent months. Markets, the pillars of the world’s second-largest economy, are weakened by government crackdowns on excessive borrowing from developers.

Last month, more than 40 cities took steps to arouse homebuyers’ interest, including subsidies, lowering mortgage rates, and allowing mortgages to be offered.

Cities in northern Tianjin issued a draft consultation on April 24, stipulating that the maximum loan amount from such funds to first home buyers should be increased from 600,000 yuan to 800,000 yuan ($ 120,000). bottom.

Chinese financial authorities allowed some homebuyers to further reduce their mortgage rates on Sunday.

In April, 47 of the 70 cities surveyed by NBS reported new home prices down from the previous month, while in March 38 cities fell.

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New home prices in Tier 3 and Tier 4 cities fell 0.6% per month from a 0.2% drop in March.

Prices in second-tier cities such as Chengdu and Nanjing fell 0.1% compared to zero growth in March. In Tier 1 cities such as Shanghai and Beijing, prices rose 0.2% from a 0.4% rise in March.

“Housing prices fell in more cities in April. The housing sector is at stake,” said Zhang Zhiwei, Chief Economist at Pinpoint Asset Management.

“Government policy has become more supportive, but not overwhelmingly. There are still quite a few restrictions.”

The outbreak and long-term blockage of COVID-19 in dozens of cities is putting further pressure on the already fragile real estate market.

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Shanghai has endured the blockage for about seven weeks. We plan to resume outdoor activities in stages and lift the blockade by June.

“The outbreak of Omicron could have hurt household income, and the blockade made housing transactions and investment difficult,” Zhang said.

“It’s not clear when the housing sector will recover.”

New home prices in Shanghai in April were unchanged from the previous month. It has been rising since November 2020.

April data, published on Monday, show a plunge in real estate sales and a decline in investment, adding to uncertainty about the outlook for the real estate market.

Real estate sales in April fell 46.6% year-on-year, the largest drop since August 2006, well below the 26.17% drop in March.

($ 1 = 6.7460 yuan) (Report by Liangping Gao and Ryan Woo, edited by Bradley Perrett)