China new home prices fall at fastest clip in nearly 10 years

FILE PHOTO: A view of an under-construction residential development by Country Garden in Shanghai, China February 29, 2024. REUTERS/Nicoco Chan/File Photo

BEIJING (Reuters) -China's new home prices fell at the fastest pace in more than 9-1/2 years in May, official data showed on Monday, as the property sector struggles to find a bottom despite government efforts to rein in oversupply and support debt-laden developers.

FILE PHOTO: Men work at the construction site of an apartment building in Beijing, China, July 29, 2023. REUTERS/Thomas Peter/File Photo

Prices were down 0.7% in May from the previous month, marking the 11th straight month-on-month decline and steepest drop since October 2014, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

In annual terms, new home prices were down 3.9% from a year earlier, compared with a 3.1% slide in April.

China's indebted property sector, once a key engine of the country's economic growth, has been hit by several crises since mid-2021, including developers defaulting on debt and stalling construction on pre-sold housing projects.

Authorities have stepped up measures to prop up the crisis-hit property sector including facilitating 300 billion yuan ($41.35 billion) to clear massive housing inventory, cutting down payments and easing mortgage rules.

But analysts believe these moves will have a limited impact on absorbing the massive housing inventory, and the lifting of home purchase restrictions in major cities might further dampen buying sentiment in smaller cities.

($1 = 7.2557 Chinese yuan renminbi)

(Reporting by Ella Cao, Liangping Gao and Ryan Woo; Editing by Kim Coghill and Sonali Paul)