China’s real estate market has been in a downturn for several years with no signs of recovery in sight. The prices of second-hand homes, which are considered a better indicator of the real estate market trend than new home prices, continue to plummet. The latest data shows that in November, second-hand home prices in one hundred cities fell both on a year-on-year and month-on-month basis, with the decline widening. Second-hand home prices have been falling for 43 consecutive months.
On December 1, a report released by the China Index Research Institute indicated that the downward pressure on second-hand home prices continues to increase due to high listing volumes and weak expectations.
In November, the average price of second-hand homes in one hundred cities was 13,143 yuan per square meter, a decrease of 0.94% from the previous month, with the decline expanding by 0.1 percentage points. Looking at the number of cities experiencing price changes, the prices of second-hand homes in 100 cities all declined compared to the previous month, marking the 43rd consecutive month of decline. Year-on-year, the average price of second-hand homes in 100 cities fell by 7.95%.
Categorized by tiers, the month-on-month prices of second-hand homes in first-tier, second-tier, and third to fourth-tier cities dropped by 1.15%, 0.98%, and 0.81% respectively, with year-on-year declines of 5.62%, 8.24%, and 7.47% respectively, all showing an increase in decline compared to the previous month.
In contrast, the new housing market saw an overall low supply in November. Cities like Shanghai, Chengdu, and Hangzhou witnessed the introduction of high-end improvement projects, driving up the average prices of new residential properties in core cities and subsequently maintaining a structured increase in new home prices in one hundred cities. The average price of new residential properties in one hundred cities was 17,036 yuan per square meter, a month-on-month increase of 0.37% and a year-on-year increase of 2.68%.
Second-hand home prices are considered a more accurate reflection of the real estate market trend than new home prices. While the prices in the new housing market have been structurally adjusted upwards, sales market pressures persist.
As of November, eight property developers achieved sales exceeding 100 billion yuan, with an average sales value of 171.04 billion yuan. Additionally, six companies achieved sales between 50 billion and 100 billion yuan, with an average value of 75.53 billion yuan; seven companies achieved sales between 30 billion and 50 billion yuan, with an average value of 39.38 billion yuan; and forty-five companies achieved sales between 10 billion and 30 billion yuan, with an increase of 2 companies compared to the previous period.
The China Index Research Institute’s report also revealed that the average residential rent in 50 cities was 34.36 yuan per square meter per month, down by 0.60% monthly and 3.57% annually.
Traditionally, the China Index Research Institute and CRIC publish the total sales of the top 100 real estate enterprises per month, but both institutions did not release the related data on November 30. This raised uncertainties about the challenges facing the Chinese real estate industry. However, the China Index Research Institute and CRIC have since released the November sales data report on Monday, December 1.
The index of second-hand home prices in one hundred cities is a monitoring indicator of the real estate market released regularly by the China Real Estate Index System (CREIS), reflecting the monthly changes in the price levels of second-hand homes in 100 key cities nationwide.