China’s Property Market Faces Largest Decline in Nine Years: Small Cities Experience Greatest Impact

Home values in China saw their most rapid decline in nearly a decade this past August, with smaller cities feeling the most significant impact. Minor metropolises like Yangzhou, Huizhou, and Dali experienced the steepest decreases, with their losses growing more severe since June and July.

Last month, China witnessed the sharpest yearly drop in home prices in nearly a decade. Attempts by the government to alleviate mortgage-financing pressures and encourage consumer spending did not succeed in uplifting the country's real estate market sentiment.

The cost of new properties has experienced a decrease for the 15th month in a row, with a 5.7 per cent reduction observed across 70 major cities in the country, compared to last year. This signifies the most significant monthly downturn since May 2015. The fall has increased from the 5.3 per cent reported in July, as per the calculations of SCMP, drawn from information provided by the National Bureau of Statistics on Saturday.

In four of China's primary cities – Beijing, Shanghai, Guangzhou, and Shenzhen – which are often seen as indicators of the country's economic progression, there was a 0.3 per cent decline in prices last month, as per the data.

The decrease in new home prices was more pronounced in Tier 2 cities like Tianjin, Dalian, and Wuhan, with a 0.7 per cent dip last month, which followed a 0.6 per cent reduction in July. The 35 smallest cities in the sample experienced the most significant decline, with prices dropping by 0.8 per cent in places such as Yangzhou, Huizhou, and Dali last month. The decline was greater than the 0.7 per cent in July and the 0.6 per cent in June.

Three minutes past twelve

An insight into China's property market: uncompensated laborers and quiet building locations.