By Liangping Gao and Ryan Woo
BEIJING (Reuters) -China’s December new home prices fell at the fastest pace since February 2015, marking the sixth straight month of declines, official data showed on Wednesday, with the sector still struggling to get back on its feet due to weak confidence.
New home prices fell 0.4% month-on-month after dipping 0.3% in November, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
Prices declined at the steepest pace in nine months, down 0.4% from a year earlier after a 0.2% fall in November.
Sustained weakness in the sector, once a key driver of economic growth accounting for around a quarter of China’s economy, could drag on the country’s broader recovery.
Authorities have been scrambling to roll out measures to boost sentiment, but home buyers remain cautious amid a sluggish economic recovery and prolonged property crisis.
The government’s measures to prop up the ailing sector include restarting its pledged supplementary lending (PSL) facility in December to inject liquidity to fund property and infrastructure projects, which fueled expectations of further property policy support.
In addition, Beijing and Shanghai relaxed their home purchase restrictions in mid-December, including by lowering the minimum down payment ratio for first and second homes.
However, these measures have failed to boost home buying sentiment as the sector has been deeply mired in a property correction since 2021.
Of the 70 cities in the home price data, 62 reported a fall in home prices, up from 59 in November.
For the home resale market, prices among 70 cities all fell year-on-year for the seventh straight month in tier-one, tier-two and tier-three cities.
Several Chinese developers, including China Evergrande Group and Country Garden, have defaulted on their offshore debt and entered into restructuring processes.
Country Garden, the country’s largest private property developer, warned this week that it expects the property market to remain weak in 2024.
Markets are eyeing more concrete property stimulus in 2024, with analysts polled by Reuters expecting the central bank to cut the one-year loan prime rate (LPR), the benchmark lending rate, by 10 basis points (bps) in the first quarter.
(Reporting by Liangping Gao, Ella Cao and Ryan Woo; Editing by Sonali Paul)