China’s new home prices fall at the fastest pace since 2015

By Liangping Gao and Ryan Woo

BEIJING (Reuters) -China’s new home prices fell at the fastest pace since May 2015 in September, official data showed on Friday, despite increased efforts to revive the struggling property sector.

In annual terms, new home prices were down 5.8% from a year earlier, deeper than a 5.3% slide in August, according to Reuters calculations based on National Bureau of Statistics (NBS) data. Reuters also reported prices fell 5.7%, which was due to an automated rounding off of figures.

New home prices were down for the 15th consecutive month, falling 0.7% month-on-month in September and matching a dip in August.

China’s prolonged property downturn, which once accounted for a quarter of its economic activity, remains a major drag on the economy.

In recent weeks, China has introduced supportive measures, including lower mortgage rates, and eased home purchase restrictions, which have spurred some demand in major cities.

On Thursday, the housing authority announced plans to expand the “white list” of eligible housing projects and increase bank lending to 4 trillion yuan by year-end, in a bid to stabilise the ailing real estate sector.

Of the 70 cities surveyed by NBS, two reported year-on-year gains in prices last month.

“Addressing the imbalance between too much stock and too little confidence will be key to stabilizing China’s property market,” said S&P Global Ratings in a research note on Friday.