Prices of second-hand homes across 100 mainland cities fell 4.8 per cent to 15,088 yuan (US$2,087) per square metre on average in March from a year earlier, according to China Index Academy, a real estate research firm. They slipped 0.56 per cent from a month ago, extending a sequential drop that started in April 2022.
Prices declined in 98 of the cities from a month earlier. Ninety of them have suffered setbacks for 10 consecutive months, the academy added in a report published on Monday.
“There is an abundant supply of pre-owned homes in the market,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute. “If owners want to strike a deal, they need to accept hefty price cuts.”
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The report added to earlier signs pointing to China’s fragile housing market and hesitance among homebuyers. Some of the nation’s biggest developers, from China Vanke to Country Garden and Wanda, have disclosed liquidity challenges this year as more debts come due, hurting market sentiment.
The nation’s top 100 property developers reported a 46 per cent drop in combined sales to 358.3 billion yuan in March from a year earlier, according to researcher China Real Estate Information Corp. That followed a 60 per cent annualised slump in February.
March’s declines did not spare the traditionally resilient tier-one cities, according to the China Index Academy report. Prices fell 0.76 per cent from February to 73,468 yuan per sq m in Beijing, and weakened 0.55 per cent to 63,504 per sq m in Shanghai over the same period.
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“The price adjustments reflect a structural shift in supply and demand in China’s property market,” Yan at E-House said. “It’s not necessarily a bad thing. It shows that the bubbles in the market are deflating, which is good news for homebuyers.”
Even as pre-owned home prices weakened, activity was actually on the rise, he said. As liquidity improves, demand for new homes could also go up in tandem, he added.
Prices of new homes in the 100 cities fared better in March, the China Index Academy report showed. They rose 0.27 per cent to 16,311 yuan per square metre on average from a month ago, and by 0.72 per cent from the same month in 2023.
March is traditionally a month for robust home sales, according to the academy, and several higher quality projects also helped draw buyers and support prices, it added.