China is trying to rescue its property market. Prices are still plunging

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Hong Kong CNN —

Prices of new homes in China suffered their biggest fall in nearly a decade last month, in a sign that Beijing’s “historic” real estate rescue has not yet revived demand.

Prices in 70 major cities were down 0.7% in May from April, National Bureau of Statistics (NBS) figures showed on Monday. That’s the steepest month-on-month drop since October 2014, according to Reuters calculation.

According to separate calculations by the Macquarie Group, prices of existing homes in those cities fell by 7.5% year-on-year last month, marking the biggest decline on record.

A month ago, Beijing unveiled wide-ranging measures to rescue the crisis-hit property market, including asking local governments across the country to buy unsold homes from beleaguered developers and easing rules on purchases.

“To be fair, one month is too short for the housing rescue package to take effect,” said analysts from Societe Generale on Monday.

Measures, including efforts to provide cheap loans to state-owned enterprises for buying unsold homes from distressed developers, will “take time” to have an impact on the property market, the analysts said.

Tower cranes are seen at a real estate construction site in Yantai, Shandong province, China, May 19, 2024.

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Still, other numbers on the real estate sector remain bleak.

Propertyinvestment for the first five months of the year dropped 10.1% from a year ago, according the NBS on Monday.

New property sales fell 28% during the same period.

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