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China's property market crisis worsened this summer, with
official data showing home prices, sales and investment all
falling in August, adding pressure on the world's second-largest
economy, which barely grew in the second quarter.
Prices in 100 cities fell 0.02% in September from a month
earlier, after declines of 0.01% in July and August,
respectively, according to a survey by China Index Academy
(CIA), one of the country's largest independent real estate
research firms.
Among the 100 cities, 56 cities posted a fall in monthly prices,
compared with 69 in August, the survey showed.
Official new home prices for September will be released by the
National Bureau of Statistics on Oct. 19.
The chill in the sector deepened after a number of overleveraged
leading developers defaulted on bonds and failed to complete
projects or even start new ones, prompting many homebuyers to
stop repaying mortgages and keeping a lid on demand for new
homes.
Sporadic COVID-19 lockdowns have also dampened consumer
confidence, while job losses and weak economic growth have made
many more careful about their spending.
To prop up the distressed sector, many small cities have taken
steps this year such as reducing down-payments, cutting mortgage
interest rates, and offering better terms for households with
more than one child.
Local governments will now be able to relax the floor on
mortgage rates for first-time home buyers in some cities in
phases, the central bank said on Thursday.
In the fourth quarter, local governments can be expected to
further implement measures to shore up their respective markets
while continuing to guard against speculative purchases, said
Cao Jingjing, a CIA analyst.
(Reporting by Liangping Gao and Ryan Woo; Editing by Kim Coghill)
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