Despite Revival Efforts, China’s Home Prices Suffer Largest Drop in Nearly a Decade: A Deep Adjustment or a New Normal?

Despite attempts to stimulate the market, China's residential property prices experienced the most significant decline in nine years. In September, the cost of new homes decreased by 6.1% year on year in 70 cities across the mainland, a downturn that is more substantial than the 5.7% drop recorded in August.

The value of homes in China experienced the sharpest drop in nine years in September, marking the 16th straight month of decreasing prices. This trend highlights the struggle to rejuvenate the housing sector, despite a high-ranking government official's claim that the market is beginning to stabilize after a series of supportive actions.

The cost of new homes decreased by 6.1% in 70 key cities on the mainland, marking the most significant drop since May 2015. This downturn, which grew from a 5.7% fall in August, was reported on Friday by the National Bureau of Statistics (NBS).

The latest data indicates a 0.5% decrease in the cost of new homes in the four major cities of Beijing, Shanghai, Guangzhou, and Shenzhen in September, after a 0.3% drop in August. Other secondary cities like Tianjin, Wuhan, and Chengdu, as well as tertiary cities like Dali, Xuzhou, and Huizhou experienced a 0.7% price reduction in the previous month, a slight increase from a 0.6% decrease in August.

The cost of used houses in Beijing, Shanghai, Guangzhou, and Shenzhen dropped by an average of 1.2 per cent in September, an increase of 0.3 per cent from August, as per the statistics. In second and third-tier cities, prices decreased by 0.9 per cent, a reduction of 1 percentage point compared to the previous month.

"The real estate sector is undergoing a significant correction, with a 'low point' progressively taking shape over three years of excessive adjustment," stated Yan Yuejin, the vice-president of the E-House China Real Estate Research Institute based in Shanghai.