People look at models of houses at the 2021 Dalian autumn real estate fair at Dalian World Expo Center on October 15, 2021 in Dalian, Liaoning Province of China.
Liu Debin | Visual China Group | Getty Images
Prices of new homes in China rose at a faster pace in October, traditionally a peak season for house hunting, a private survey showed on Friday, suggesting that recent support measures could be having some early impact in a crisis-hit market.
The average price across 100 cities edged up 0.29%, compared with the previous month’s 0.14%, according to data released by property researcher China Index Academy.
On a year-on-year basis, the average price rose 2.08% versus 1.85% growth in September.
The property market, once accounting for roughly a quarter of economic activity, is grappling with a prolonged downturn since 2021 and remains a major drag on the world’s second-largest economy.
Authorities rolled out a raft of property easing measures at the end of September, including a cut in the minimum down payment ratio to 15% for all housing categories and relaxation in home purchase restrictions.
The stimulus measures appear to have given a lift to the industry in some major cities. The survey showed mega city Shanghai recorded the largest month-on-month house price increase of 1.09%.
However, the small cities continue to languish, underscoring cautious buyer sentiment that has chilled the real estate market in recent years.
Average new home prices fell 0.02% from a month earlier in smaller cities last month, the China Index Academy data showed.
New homes sold by value fell 34.7% year-on-year in January-October, though they rose 10.53% in October, according to a separate survey released by the academy a day earlier.
“The surge in top-tier cities may merely be the result of pent-up demand in response to those easing measures. Such demand is unlikely to be sustainable, as evidenced by cases of short-lived recoveries over the past two years,” said economists at Nomura in a research note earlier this week.
“Ensuring the delivery of pre-sold homes is key to reversing the property slump, especially in low-tier cities … direct funding support from Beijing will be much more effective,” said Nomura.