China’s November new home prices fall for fourth month

BEIJING (Reuters) – China’s new home prices fell for a fourth month in November in monthly terms, weighed by a sluggish economy and a still-ailing property sector, official data showed on Thursday, but recent favourable policies and a relaxation in COVID curbs have burnished the outlook.

New home prices in November fell 0.2% month-on-month after a 0.3% slide in October, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

Prices dropped 1.6% year-on-year, falling for the seventh straight month. Prices slid 1.6% year-on-year in October.

China has rolled out a flurry of measures to support its embattled property sector, which has been squeezed by a liquidity crunch. The steps included lifting a year-long ban on fundraising via equity offerings for listed property companies.

The sector, once a key engine of growth, has been hit by multiple crises since authorities started a crackdown on excessive leverage in mid-2020, with cash-strapped developers defaulting on debt obligations and halting construction, prompting homebuyers to boycott mortgage payments.

Beijing has ordered its top four state-owned banks to issue offshore loans to help developers repay overseas debt, sources have told Reuters, in Beijing’s latest support for the sector.

Beijing’s recent easing of COVID-related curbs is widely expected to benefit the property sector, as the country gradually pivots away from a zero-COVID policy that demanded economically disruptive lockdowns and mandatory quarantine in government facilities.

Nomura analysts wrote in a note that they have raised their growth forecast for 2023 to 4.8% from 4.0%.

“Ending zero-COVID is both necessary and inevitable, and it’s the precondition for a growth recovery in 2023,” Nomura analysts said. “However, we continue to caution that the road to a full reopening may still be painful and bumpy.”

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