People view house models at the 2021 Dalian Autumn Real Estate Expo at the Dalian World Expo Center in Dalian, Liaoning Province, China, October 15, 2021.
Liu Debin|Visual China Group|Getty Images
Prices of new homes in China rose faster in October, traditionally the peak home-buying season, a private survey showed on Friday, suggesting recent support measures could have some early impact on the crisis-hit market.
Data released by the China Index Academy, a real estate research organization, showed that the average house price in 100 cities rose slightly by 0.29%, compared with an increase of 0.14% last month.
It rose 2.08% year-on-year and 1.85% in September.
The housing market, which once accounted for about a quarter of economic activity, is facing a prolonged downturn in 2021 and remains a major drag on the world’s second-largest economy.
At the end of September, the authorities launched a series of real estate easing measures, including lowering the minimum down payment ratio for all housing categories to 15% and easing restrictions on home purchases.
Stimuli appear to have boosted the industry in some major cities. The survey showed that the monthly increase in house prices in the big city Shanghai was the largest, reaching 1.09%.
However, the economic downturn in smaller cities continues, underscoring cautious buyer sentiment as the real estate market has cooled in recent years.
According to data from the China Index Academy, the average price of new residential buildings in small cities fell by 0.02% last month compared with the previous quarter.
According to another survey released by the institute the day before, new home sales decreased by 34.7% annually from January to October, but increased by 10.53% annually in October.
“The surge in first-tier cities may simply be the result of pent-up demand due to these easing measures. This demand is unlikely to be sustained, as evidenced by the short-lived recovery in the past two years.” Economists at Nomura Securities said earlier this week pointed out in a recent research report.
“Ensuring the delivery of pre-sale homes is key to reversing the downturn in the real estate market, especially in lower-tier cities… Direct financial support from Beijing will be more effective,” Nomura said.
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