China’s prices of old and new homes narrowed their declines in January

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Some embers of a revival may be seen in tier-one cities, where the sales prices of new homes rose 0.6 per cent last month, reversing the 0.1 per cent contraction in December

The latest data puts any prospect of a recovery to mid-2022

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Residential buildings beside the great canal in Hangzhou, in China’s Zhejiang province. Photo: Getty Images

Lam Ka-sing

Published: 6:53pm, 21 Feb 2022Updated: 7:09pm, 21 Feb 2022

The prices of lived-in homes and newly completed property continued their declines last month in China, underscoring the efforts needed to resuscitate one of the most important sectors in the world’s second-largest economy after nearly six years of clampdowns.

The price index of new homes fell by 0.04 per cent in January across 70 cities tracked by the National Bureau of Statistics, narrowing from the 0.2 per cent drop in December. In the secondary market, the price index of lived-in homes contracted by 0.3 per cent last month, compared with 0.4 per cent in December.

The latest data puts any prospect of a recovery to mid-2022, as banks and developers work under the close scrutiny of local authorities to relax some of the regulations around mortgage financing, land purchases and the use of property sales proceeds for refinancing debt.

“Hot cities, the primary market in some areas and the secondary market will see clear upwards trends” around the middle of the year, said Li Yujia, senior economist at the Guangdong Urban and Rural Planning and Design Institute, a policy advisory body.

Residential buildings in Beijing on January 13, 2021. Photo: Reuters.

China’s housing market is likely to bottom out this year, as the overall economic policy is aimed at ensuring stability, starting with tier-one cities, Li said. Top-tier cities will widen their leads over lower-tier cities for population and capital flows.

China’s prices of old and new homes narrowed their declines in January

Some embers of a revival may be seen in tier-one cities, where the sales prices of new homes rose 0.6 per cent last month, reversing the 0.1 per cent contraction in December The latest data puts any prospect of a recovery to mid-2022

Some embers of a revival may be seen in tier-one cities, where the sales prices of new homes rose 0.6 per cent last month, reversing the 0.1 per cent contraction in December

The latest data puts any prospect of a recovery to mid-2022