China’s Oct home prices extend fall on weak sentiment

BEIJING (Reuters) -China’s new home prices fell for the fourth month in October, official data showed on Thursday, as government support measures did little to lift the gloom hanging over the country’s consumers and its debt-laden property sector.

New home prices fell 0.3% month-on-month after a 0.2% dip in September, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

Compared with a year earlier, prices were down 0.1%, matching a decline in September, August and July.

Despite the lifting of strict COVID measures late last year and a slew of support measures, the world’s second-biggest economy has struggled to get back on solid footing, largely due to weak consumer confidence and the deepening property crisis.

The bearish home price figures followed data on Wednesday showing some improvement in industrial output and retail sales, which both beat expectations in October, but overall investment growth was tepid and property sales and investment slumped sharply.

Authorities have rolled out a flurry of measures to prop up the property sector — which once accounted for about a quarter of China’s economic activity — including relaxing curbs on home purchases and cutting borrowing costs.

But potential home buyers remain cautious as more developers struggle with excessive debt and delays completing presold housing projects.

Out of 70 cities, 56 reported declines in monthly prices last month, up from 54 in September.

House prices in three major cities Beijing, Shenzhen and Guangzhou all fell month-on-month in October.

The property market is still in adjustment and transformation, and there will be “twists and turns” in the economic recovery, Liu Aihua, spokesperson for the National Bureau of Statistics, said on Wednesday.

China’s central bank plans to provide at least $137 billion of low cost financing to the country’s urban village renovation and affordable housing programmes.

(Reporting by Liangping Gao, Ella Cao and Ryan Woo; Editing by Jacqueline Wong)