China’s home-price growth weakens to eight-month low on cooling measures while Evergrande’s struggles keep buyers away

The average price of new homes across 70 major cities rose 0.2 per cent month on month in August, the slowest since February’s 0.4 per cent gain

Negative news surrounding China Evergrande hits sales at indebted developer

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The construction site of an Evergrande housing complex in Zhumadian, central China’s Henan province, pictured on September 14, 2021. Photo: AFP

Published: 3:43pm, 15 Sep 2021Updated: 11:00pm, 15 Sep 2021

China’s home prices grew at the slowest pace in the past eight months in August, as buying confidence took a hit from the government’s cooling measures.

Troubles at China Evergrande Group, the world’s most indebted developer, which is struggling to complete its housing projects, also weighed on sentiment.

The average price of new homes across 70 major cities rose 0.2 per cent month on month in August, slowing from a 0.3 per cent increase in July, according to figures released by the National Bureau of Statistics (NBS) on Wednesday. In February, prices increased by 0.4 per cent, the highest this year.

“The softening property market was largely due to negative news surrounding the sector, such as more cities rolling out restrictions to cap price growth for new and old homes, as well as increasing difficulties in obtaining mortgage loans,” said Andy Lee Yiu-chi, chief executive for southern China at property agency Centaline China.

Residents walk near Evergrande’s housing complex in Beijing. Sales at the company’s projects have been hit because of worries over its debt. Photo: EPA-EFE

He added that China’s property market is likely to undergo a correction but was reluctant to predict the extent of the decline in prices.

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