China’s decline in home prices abated for a fourth month in December, reflecting signs of market stabilization after the government’s latest stimulus blitz.
New home prices in 70 cities, excluding state-subsidised housing, dropped 0.08% from November, the smallest decline in a year and a half, National Bureau of Statistics figures showed Friday. Existing home values slid 0.31%, easing from a 0.35% drop a month earlier.
The figures suggest property values are beginning to steady as policymakers step up efforts to end the housing slump that has weighed on Asia’s largest economy for more than three years. The downturn has wiped out billions of dollars in household wealth and added to deflationary pressures.
“The mounting policy support has warmed up homebuyer sentiment,” said Liu Shui, an analyst at China Index Holdings. “However, the broader home-market recovery still faces mounting challenges this year.”
Improvements were seen on a year-on-year basis too, with new-home prices falling 5.73% versus 6.07% a month earlier. Used-home values dropped 8.11% compared with 8.54% in November.
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Still, the situation for property developers remains grim. Shares of China Vanke Co. tumbled as much as 9.1% in Hong Kong trading on Friday morning following questions over the whereabouts of its top executive and a local news report that the company may be seized by state authorities.
Plunging sales have raised questions over whether Vanke can meet a wall of debt repayments this year. The firm was once seen as too big to fail due to its government backing, but Beijing has yet to signal its stance toward the property giant.
The home price figures come just days before Donald Trump returns to the White House, threatening tariffs as high as 60% that could wreck trade with the world’s No. 2 economy. China’s exporters would then have to find domestic buyers in the face of obstacles abroad.
Top officials led by President Xi Jinping have vowed to “stem the property market from falling and facilitate its stabilization.” But policymakers last month provided no incremental details compared with previous policy communications, according to Goldman Sachs Group Inc. analysts including Lisheng Wang.
