New and used home prices in 70 cities across China continued to decline in May, with new home prices dropping by -0.7% and secondary market prices declining by -1.0% month-on-month respectively. This represents the largest monthly drops in the current cycle, according to recent data. Despite policy support measures aimed at stabilizing the market, housing prices have fallen by -6.4% for new homes and -12.3% for secondary market homes since their peak.
Among the 70 cities included in the sample, only Shanghai and Taiyuan saw an increase in new home prices in May, with none experiencing an increase in the secondary market. This is a significant contrast to April when six cities reported higher new home prices and one city saw an increase in secondary market prices. Year to date, only two cities have witnessed an increase in new home prices, while none have seen a rise in secondary market prices. A total of 16 cities have experienced declines of over 3% in new home prices, and 48 cities have seen declines in the secondary market.
New home sales have decreased by -27.9% year-on-year year-to-date, indicating a significant contraction in the market. Real estate investment has also fallen by -10.1% year-on-year year-to-date in the first five months of the year, compared to -9.8% year-on-year year-to-date in the first four months. Despite economists’ growing pessimism, the data presents a weaker picture than expected due to disappointing results from policy support measures aimed at slowing down housing price declines and stabilizing the market