China’s new home prices recorded their fastest monthly drop in a year in October, underscoring the ongoing weakness in the country’s troubled property market and reinforcing the need for stronger policy support.
Official data from the National Bureau of Statistics showed that prices fell 0.5% month-on-month, the sharpest decline since October last year, following a 0.4% decrease in September. On an annual basis, prices slipped 2.2%, matching the pace of decline seen in September.
The continued downturn during September and October — typically peak months for property sales — highlights the significant challenges Beijing faces as it tries to stabilize the sector amid broader economic pressures.
Since the property market turmoil began in 2021, developers have struggled with weak sales and tight liquidity. Stabilizing the sector is seen as essential for boosting household consumption and reducing China’s reliance on state-led infrastructure projects and exports, which have also been hit by U.S. President Donald Trump’s trade measures.
While authorities introduced several supportive policies in the second half of 2024, large-scale new stimulus has been avoided this year, with recent measures mostly repeating previous commitments.
Zhang Dawei, analyst at Centaline, noted that the sector faces multiple structural challenges—including declining populations in smaller cities, abundant resale listings, and persistently low buyer confidence. He called for further mortgage policy easing to help restore sentiment.
Policymakers cut mortgage costs for some buyers in early 2025 but have since largely reiterated pledges to keep the market stable. A survey by the China Index Academy across more than 260 cities found a notable drop in home-buying confidence in smaller cities, falling 2.9 percentage points month-on-month.
The resale market remains under heavy pressure, with both annual and monthly prices declining across all 70 surveyed cities, according to official data.
Xu Tianchen, senior economist at the Economist Intelligence Unit, said the ongoing slide in second-hand home prices is approaching a critical level and warned that continued declines may trigger government intervention, similar to rapid policy responses seen in 2024.
Additional data showed that both property investment and home sales by floor area continued to contract over the first 10 months of the year.
Looking forward, government policy recommendations for China’s 2026–2030 development plan emphasize “high-quality” real estate development, improving housing supply for diverse needs, strengthening financing systems, and addressing risks within the property sector.
