On August 15, the Chinese National Bureau of Statistics released data indicating that in July, the prices of new and existing homes in 70 large and medium-sized cities in China all experienced year-on-year and month-on-month declines.
According to Reuters calculations, housing prices in these 70 cities dropped by 4.9% year-on-year in July, marking the largest decline in over nine years. Month-on-month, prices fell by 0.7% for the 13th consecutive month. Analysts point out that the policies introduced by the Chinese Communist Party (CCP) have failed to restore market confidence, painting a grim outlook for the future.
Data released by the Chinese National Bureau of Statistics on August 15 further revealed that in July, the sales prices of new residential properties in first-tier cities dropped by 4.2% year-on-year, expanding by 0.5 percentage points compared to the previous month. Among them, Beijing, Guangzhou, and Shenzhen experienced price drops of 3.3%, 9.9%, and 8.0% respectively, while Shanghai saw a 4.4% increase.
In second-tier cities, sales prices fell by 4.8%, expanding by 0.3 percentage points from the previous month; and in third-tier cities, prices dropped by 5.8%, widening by 0.4 percentage points compared to the previous month.
As for existing homes, sales prices in first-tier cities decreased by 8.8% year-on-year, with a slight narrowing of 0.2 percentage points from the previous month. Among them, Beijing, Shanghai, Guangzhou, and Shenzhen experienced drops of 7.2%, 5.6%, 12.4%, and 9.8% respectively. In second-tier cities, prices decreased by 8.2%, expanding by 0.3 percentage points from the previous month, while third-tier cities saw an 8.1% decline, widening by 0.4 percentage points.
Reuters’ analysis based on data from the Chinese National Bureau of Statistics revealed that in July, housing prices in the 70 cities dropped by 4.9% year-on-year, a 0.4% increase from the previous month, marking the largest decline since June 2015.
Looking at the month-on-month comparison, in July, the sales prices of new residential properties in first-tier cities decreased by 0.5%, mirroring the previous month. Beijing, Guangzhou, and Shenzhen each experienced drops of 0.5%, 0.8%, and 0.9% respectively, whereas Shanghai saw a 0.2% increase.
For second-tier cities, the sales prices of new residential properties dropped by 0.6%, with a 0.1 percentage point narrower decline compared to the previous month. In third-tier cities, prices fell by 0.7%, expanding by 0.1 percentage point from the previous month.
Regarding existing homes, sales prices in first-tier cities experienced a 0.5% month-on-month decrease, broadening by 0.1 percentage point from the previous month. Beijing remained stable, while Shanghai saw a 0.1% increase, and Guangzhou and Shenzhen both saw decreases of 0.9% and 1.2% respectively. Prices in second and third-tier cities dropped by 0.8% compared to the previous month, with a slight narrowing of 0.1 percentage point from the previous month.
According to Reuters’ calculations, housing prices in the 70 cities dropped by 0.7% month-on-month in July, maintaining the same decline as the previous two months, marking the 13th consecutive month of decline.
The Chinese National Bureau of Statistics data from the 15th of the month showed that from January to July, the sales area of new commercial housing decreased by 18.6% year-on-year, with a slight narrowing of 0.4 percentage points compared to the period from January to June. The sales area of residential housing specifically dropped by 21.1%.
From January to July, the sales value of new commercial housing amounted to 533.3 billion yuan, a year-on-year decrease of 24.3%, with a slight narrowing of 0.7 percentage points from the January to June period. This included a 25.9% decrease in residential sales value.
In July alone, the sales downturn continued, with the sales area of commercial housing witnessing a 15.4% year-on-year decrease, expanding by 0.9 percentage points compared to June’s 14.5% decline. Sales value also saw an 18.5% year-on-year decrease, increasing by 4.2 percentage points from June’s 14.3% decline.
Additionally, the Chinese National Bureau of Statistics also reported that from January to July, national real estate development investment decreased by 10.2% year-on-year, expanding by 0.1 percentage point compared to the January to June period. Specifically, residential investment decreased by 10.6%, amounting to 4.623 trillion yuan.
From January to July, real estate development enterprises’ construction area of houses decreased by 12.1% year-on-year, with residential construction area dropping by 12.7%. The newly started construction area of houses decreased by 23.2%, with a 23.7% decrease in residential new construction area. Completed construction area of houses dropped by 21.8%, with residential completion area decreasing by the same percentage.
Economic analysts from the Economist Intelligence Unit (EIU) in China, including Xu Tianchen, pointed out that the continuous decline in housing prices, along with the contraction in investment and new home sales, signals a lack of targeted and substantial supportive policies. This suggests that the real estate situation in China may remain challenging in the foreseeable future.
Nie Wen, Chief Economist at Huabao Trust, mentioned that the real estate sector is still undergoing significant adjustments and remains a key factor in the current economic downturn. Short-term trends in housing prices will continue to depend on further adjustments in real estate policies and destocking efforts, while medium-term developments will hinge on improvements in household incomes.
Zhang Dawei, Chief Analyst at Centaline Property, stated that the real estate market in July continued to operate at low levels, with significant declines in sales by major real estate companies. The market is still undergoing a deep adjustment process, with buyer confidence remaining insufficient.
Reuters’ analysis highlighted that despite the CCP repeatedly implementing policies such as lowering loan interest rates to support the real estate industry, market confidence has yet to stabilize or recover. The sluggish real estate market is impeding economic growth, making it challenging for Beijing to achieve its annual economic growth target of around 5%.