What’s new: China’s new-home prices were stable in February compared with January, ending seven consecutive months of declines as government measures to shore up the struggling real estate sector showed signs of taking effect.
The average price of new homes in 100 major cities remained unchanged at 16,174 yuan ($2,322) per square meter last month, improving from a 0.02% decline in January, according to data in a March 1 report from China Index Holdings Ltd., a property consultant.
New-home prices in first-tier cities such as Beijing and Shanghai continued to climb slightly month-on-month, while prices in smaller second-tier cities such as Chengdu and Changsha ended their recent declines and rose 0.01%.
Average prices of existing homes in the 100 cities dropped 0.01% in February, easing from a 0.11% decline the previous month.
Background: Ongoing weakness in China’s real estate sector is weighing on the country’s economy, even as the new February data show the market could finally be stabilizing.
China began taking a series of steps to support the real estate market last year through measures like relaxing restrictions on home buyers and providing easier access to funds for developers to complete stalled projects. Further policies to boost the market, both on the supply and demand sides, could come after the end of the “Two Sessions” meetings now taking place in Beijing, China Index Holdings said in its report.
Following years of explosive growth that helped make China the world’s second largest economy, the country’s property market began slumping in mid-2021 after Beijing took steps to curb excessive borrowing, depriving builders of funds.
Contact reporter Ward Zhou (nanyuzhou@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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