New home prices in China fall 5.3% in August 2024
Cement

New home prices in China fall 5.3% in August 2024

Official data revealed that China's new home prices had fallen at their fastest rate in over nine years in August, as supportive measures failed to induce a significant recovery in the property sector. The data showed that new home prices were down 5.3% compared to the previous year, marking the sharpest decline since May 2015, compared to a 4.9% drop in July, based on calculations by Reuters from National Bureau of Statistics (NBS) data. Monthly figures indicated that new home prices had fallen for the fourteenth consecutive month, decreasing by 0.7%, which was the same drop recorded in July.

The property market in China continues to struggle with deeply indebted developers, incomplete apartments, and declining buyer confidence, which is putting a strain on the financial system and threatening the 5% economic growth target for the year. A Reuters poll had forecast that home prices in China would decline by 8.5% in 2024 and by 3.9% in 2025 as the sector struggles to stabilise.

Zhang Dawei, chief analyst at property agency Centaline, mentioned that the property market is still gradually bottoming out, with home buyers' demand, income, and confidence expected to take some time to recover. He noted that the market was anticipating a stronger policy response. According to the official data released on Saturday, property investment had fallen by 10.2% and home sales had dropped by 18.0% year-on-year in the first eight months of the year.

Chinese policymakers have stepped up efforts to support the property sector, including reducing mortgage rates and lowering home buying costs. These measures have partially revitalised demand in major cities, while smaller cities, which have fewer home purchase restrictions and high levels of unsold inventory, are particularly vulnerable. This situation underscores the difficulties faced by authorities in balancing demand and supply across different regions.

In a research note on Friday, Nomura indicated that with the growth slowdown worsening under new headwinds in the second half of the year, Beijing might eventually need to step in as the "builder of last resort" by directly providing funding to delayed residential projects that have already been pre-sold. According to Bloomberg News, China may cut interest rates on over $5 trillion in outstanding mortgages as early as this month.

To support these mortgage rate cuts, economists at ANZ suggested that a reduction in the five-year Loan Prime Rate was likely in September, along with a 20 basis point cut to the medium-term lending facility (MLF) and a 50 basis point cut to the reserve requirement ratio (RRR).

The 14th RAHSTA Expo, part of the India Construction Festival, will be held on October 9 and 10, 2024, at the Jio Convention Centre in Mumbai. For more details, visit: https://rahstaexpo.com

Official data revealed that China's new home prices had fallen at their fastest rate in over nine years in August, as supportive measures failed to induce a significant recovery in the property sector. The data showed that new home prices were down 5.3% compared to the previous year, marking the sharpest decline since May 2015, compared to a 4.9% drop in July, based on calculations by Reuters from National Bureau of Statistics (NBS) data. Monthly figures indicated that new home prices had fallen for the fourteenth consecutive month, decreasing by 0.7%, which was the same drop recorded in July. The property market in China continues to struggle with deeply indebted developers, incomplete apartments, and declining buyer confidence, which is putting a strain on the financial system and threatening the 5% economic growth target for the year. A Reuters poll had forecast that home prices in China would decline by 8.5% in 2024 and by 3.9% in 2025 as the sector struggles to stabilise. Zhang Dawei, chief analyst at property agency Centaline, mentioned that the property market is still gradually bottoming out, with home buyers' demand, income, and confidence expected to take some time to recover. He noted that the market was anticipating a stronger policy response. According to the official data released on Saturday, property investment had fallen by 10.2% and home sales had dropped by 18.0% year-on-year in the first eight months of the year. Chinese policymakers have stepped up efforts to support the property sector, including reducing mortgage rates and lowering home buying costs. These measures have partially revitalised demand in major cities, while smaller cities, which have fewer home purchase restrictions and high levels of unsold inventory, are particularly vulnerable. This situation underscores the difficulties faced by authorities in balancing demand and supply across different regions. In a research note on Friday, Nomura indicated that with the growth slowdown worsening under new headwinds in the second half of the year, Beijing might eventually need to step in as the builder of last resort by directly providing funding to delayed residential projects that have already been pre-sold. According to Bloomberg News, China may cut interest rates on over $5 trillion in outstanding mortgages as early as this month. To support these mortgage rate cuts, economists at ANZ suggested that a reduction in the five-year Loan Prime Rate was likely in September, along with a 20 basis point cut to the medium-term lending facility (MLF) and a 50 basis point cut to the reserve requirement ratio (RRR).

Next Story
Infrastructure Energy

Gujarat Powers Ahead with Solar Energy

Gujarat is emerging as a leader in India’s solar energy sector, with an installed capacity of 14.7 GW, making it the second-highest solar capacity state in the country. The state's total renewable energy capacity stands at 27.8 GW, and ambitious plans aim to add 31.9 GW of solar-wind hybrid projects. These details were shared by Arun Mahesh Babu, Managing Director of Uttar Gujarat Vij Company Limited (UGVCL) and Gujarat Power Corporation Limited (GPCL). Babu highlighted Gujarat’s solar and wind energy projects, which are instrumental in helping India meet its national target of 500 GW of ..

Next Story
Infrastructure Energy

UK Shuts Last Coal Plant as India Maintains Coal in Energy Mix

As the UK officially closed its last coal power plant signaling its exit from coal-based energy, policy experts in India emphasized that coal will remain part of India's energy mix for the foreseeable future. While developed nations like the UK are moving towards coal-free energy systems by 2040, India faces unique challenges as a developing country with substantial energy demands. The UK's closure of its last coal plant marks a significant moment in energy history, as the country had been one of the pioneers of coal power since 1882. According to global energy think tank Ember, more than a th..

Next Story
Infrastructure Urban

NCLAT Clears Supertech to Resume Work on Doon Square in Dehradun

The National Company Law Appellate Tribunal (NCLAT) has granted approval for Supertech to resume construction of its Doon Square project in Dehradun. This decision follows the submission by Supertech that the lender, co-developer, and homebuyers had all accepted its proposal to complete the stalled project. The approval paves the way for the project’s completion within 515 days, or just over one year and four months. Out of the 750 planned units, only 150 studio apartments have been delivered, with the remaining awaiting completion. Supertech’s proposal, submitted to NCLAT, was accepted by..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000