China's Home Price Declines Ease for Third Month, But Recovery Remains Fragile
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China's property market is showing signs of stabilization, with new-home price declines easing for the third consecutive month in November, reports Bloomberg. However, experts warn that the recovery is still fragile and uneven across different regions.
National Bureau of Statistics figures released Monday revealed that new-home prices in 70 cities, excluding subsidized housing, fell by 0.2% from October, marking the smallest decrease in 17 months. Used home prices also saw a modest decline of 0.35%, the least since May 2023.
"The recovery is still fragile and not broad-based," says Raymond Cheng, head of China property research at CGS International Securities Hong Kong, to Bloomberg. "Property markets in small cities are still very challenging with high inventory levels."
Despite these tentative signs of improvement, separate official figures showed that home sales picked up in November, while real estate investment continued to decline. China's housing downturn has been a major drag on the country's economy for over three years, prompting authorities to introduce a series of measures to stimulate demand and address excess supply.
Top officials, including President Xi Jinping, reiterated their commitment to stabilizing the property market in December, following the Central Economic Work Conference. However, unlike previous policy communications, they offered no specific details about new measures.
Bloomberg Intelligence reports that this lack of detail has led to a dip in a gauge of Chinese property developer shares.
While official data shows improving sales and price stability, private data tells a different story. Transactions by the 100 largest real estate companies shrank by 6.9% year-on-year in November, reversing a brief gain in October, according to China Real Estate Investment Corp. figures.
UBS Group AG data also shows that property sales growth has cooled in the first half of December.
"Steadying residential sales and prices will take time and the expected US tariff hike would bring fresh downward pressure," UBS economists wrote in a recent note, predicting that sales will stabilize in the first half of 2026.
The wave of stimulus measures implemented since September may be producing a short-lived recovery rather than a sustainable one, suggests Kristy Hung, a Bloomberg Intelligence analyst. "We are still expecting a drop in new home sales volume as well as prices."
Fitch Ratings expects new home prices to fall by another 5% next year.
China's economic outlook for 2025 and beyond remains uncertain, even though the Central Economic Work Conference reaffirmed the country's commitment to achieving its 2023 growth target of around 5%. Many economists anticipate a similar target for 2025.