China's home prices dip for 4th month, may weaken further
By Liangping Gao and Ryan Woo
BEIJING (Reuters) -China's new home prices fell for the fourth straight month with dozens of cities hit by declines, the most since the peak of the COVID-19 pandemic last year, suggesting a broader weakening in the sector that could drag on the country's overall recovery.
New home prices in October dropped 0.3% month-on-month after a 0.2% dip in September, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
Once a key engine of economic growth accounting for around a quarter of China's economic activity, a regulatory crackdown since 2020 to curb debt has tightened liquidity and raised default risks for developers, delaying many projects.
Authorities have rolled out a flurry of measures to prop up the pivotal sector, including relaxing curbs on home purchases and cutting borrowing costs but homebuyers remain cautious.
«The most important reason for the bearish home prices is that demand is weak, buyers don't know if pre-sold homes they buy will be delivered on the dates promised by the developers,» said Ma Hong, senior analyst at Zhixin Investment Research Institute.
Nomura estimated there are around 20 million pre-sold units that are either not yet constructed or delayed. That is equivalent to 20 times the number of unfinished projects by indebted developer Country Garden as of end-2022.
Bearish home prices follow data on Wednesday showing some improvement in industrial output and retail sales, which both beat expectations in October, but overall investment growth was tepid and property sales and investment slumped sharply.
«Residents remain uncertain about income growth, and there are poor returns on financial investments in the country. They are hesitant to
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