China’s property market showed signs of stabilizing in December, with the decline in home prices easing for the fourth consecutive month, reflecting the impact of recent government stimulus measures. According to data from the National Bureau of Statistics released on Friday, new home prices in 70 cities, excluding state-subsidized housing, fell by just 0.08% from November, marking the smallest decline in a year and a half. Prices for existing homes dropped 0.31%, a slight improvement from the 0.35% fall recorded in November.
The figures suggest that property values may be beginning to stabilize, aided by intensified government efforts to address the housing downturn, which has weighed heavily on China’s economy for over three years. This prolonged slump has led to substantial losses in household wealth and has contributed to the country’s ongoing deflationary pressures.
“The increasing policy support has boosted homebuyer confidence,” said Liu Shui, an analyst at China Index Holdings. “However, broader recovery in the housing market still faces significant challenges this year.”
Year-on-year data also showed improvements. New home prices dropped by 5.73% in December, an improvement from November’s 6.07% decrease. Similarly, existing home prices fell by 8.11%, easing from the 8.54% drop in November.
However, property developers are still facing significant challenges. Shares of China Vanke Co. plummeted by as much as 9.1% in Hong Kong on Friday, following concerns about the company’s top executive’s whereabouts and a local news report indicating that the state may seize control of the firm. The company, which had long been considered too large to fail due to its ties with the government, now faces scrutiny amid a steep decline in sales and a looming debt repayment crisis. Beijing has yet to make its stance clear on the troubled property giant.
These developments come just days ahead of President-elect Donald Trump’s return to the White House, with his proposed tariffs of up to 60% threatening to disrupt trade with China. This could force Chinese exporters to rely more heavily on the domestic market, potentially further straining an already fragile economy.
Chinese leaders, including President Xi Jinping, have reiterated their commitment to stabilizing the property market. However, according to analysts from Goldman Sachs Group Inc., the latest policy announcements have lacked new details, leaving investors uncertain about the specifics of future measures.
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