China’s new home prices in April rise at a slower pace as Covid-19 lockdowns force developers to shut sales offices

The average new home price in 100 Chinese cities increased 0.02 per cent to 16,193 yuan (US$2,450) per square metre in April, easing from 0.03 per cent growth in March

Contracted sales at China’s top 17 developers could fall by 60 per cent last month from a year earlier, according to China Real Estate Information Corporation forecast

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Lockdowns in mainland Chinese cities such as Shanghai hurt home sales last month. Photo: Bloomberg

Published: 7:00pm, 4 May 2022

China’s new home prices rose at a slower pace last month from March, as sales were affected after developers were forced to shut their sales offices in many cities due to the nation’s worsening Covid-19 situation.

The average new home price in 100 Chinese cities increased 0.02 per cent to 16,193 yuan (US$2,450) per square metre in April, easing from 0.03 per cent growth in March, according to data from China Index Academy, one of the country’s biggest independent real estate research firms.

“Developers’ contracted sales have been significantly affected by the zero-Covid policy adopted by the Chinese government, forcing them to close showrooms,” said Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities.

With an increasing number of mainland cities including Shanghai, Jilin and Xian under lockdown at various times since mid-March because of rising Covid-19 cases, real estate agency China Real Estate Information Corporation (CRIC) forecast in a report on April 22 that contracted sales at China’s top 17 developers could fall by 60 per cent last month from a year earlier.

Contracted home sales at Shimao could have dropped by as much as 76 per cent in April from a year earlier. Photo: Reuters

Developers such as CIFI Holdings and Shimao Group Holdings, who have higher exposure in these cities, could see sales declining by 62 per cent and 76 per cent, respectively last month.

The outlook for the property market remains weak as the Covid-19 situation has dampened home-buying desire, Cheng said, adding that developers’ moves to promote sales via online channels has not had the desired impact.