Prices of new homes in China rose at a faster pace in October, traditionally a peak season for house hunting, a private survey showed on Friday, suggesting that recent support measures could be having some early impact in a crisis-hit market.
The average price across 100 cities edged up 0.29%, compared with the previous month’s 0.14%, according to data released by property researcher China Index Academy.
On a year-on-year basis, the average price rose 2.08% versus 1.85% growth in September.
The property market, once accounting for roughly a quarter of economic activity, is grappling with a prolonged downturn since 2021 and remains a major drag on the world’s second-largest economy.
Authorities rolled out a raft of property easing measures at the end of September, including a cut in the minimum down payment ratio to 15% for all housing categories and relaxation in home purchase restrictions.
The stimulus measures appear to have given a lift to the industry in some major cities. The survey showed mega city Shanghai recorded the largest month-on-month house price increase of 1.09%.
However, the small cities continue to languish, underscoring cautious buyer sentiment that has chilled the real estate market in recent years.
Average new home prices fell 0.02% from a month earlier in smaller cities last month, the China Index Academy data showed.
New homes sold by value fell 34.7% year-on-year in January-October, though they rose 10.53% in October, according to a separate survey released by the academy a day earlier.
“The surge in top-tier cities may merely be the result of pent-up demand in response to those easing measures. Such demand is unlikely to be sustainable, as evidenced by cases of short-lived recoveries over the past two years,” said economists at Nomura in a research note earlier this week.
“Ensuring the delivery of pre-sold homes is key to reversing the property slump, especially in low-tier cities … direct funding support from Beijing will be much more effective,” said Nomura.