Key facts
- China's resale home prices fell 0.75% in June compared to a 0.71% decline in May, according to China Index Academy.
- Year-on-year, resale home prices dropped 7.26% in June.
- New home prices increased by 0.16% in June, a slower pace than the previous month.
- The property sector has been in a downturn since 2021 following regulatory actions against developer debt.
China's resale home prices experienced a faster decline in June, underscoring the ongoing struggles within the nation's property market despite various policy support measures. According to a survey by China Index Academy, one of the country's largest real estate research firms, resale home prices fell 0.75% in June, an acceleration from the 0.71% decrease observed in May. On a year-on-year basis, prices dropped 7.26%, slightly more than the 7.24% fall in the prior month.
New home prices, meanwhile, saw a more modest increase of 0.16% in June, matching the pace of May. The firm indicated that real estate policies in the latter half of the year would likely continue to target both supply and demand sides, as near-term new home sales remain under pressure.
The property sector has been in a state of severe stress since 2021, following government crackdowns on excessive borrowing by developers. These regulatory actions led to liquidity issues for major firms, resulting in unfinished construction projects, declining home sales, and widespread debt defaults. Despite efforts to stimulate the market, including interest rate cuts and buyer incentives, weak consumer confidence and oversupply in certain areas have limited their effectiveness. Goldman Sachs noted in June that demand for new homes is projected to be significantly lower than its 2017 peak. Chinese leaders have pledged to optimize policies to boost demand and stabilize the market.