China's Property Market Sees Incremental Growth Amid Policy Interventions

A recent private survey indicates that new home prices in China have increased in November. This rise comes amid governmental efforts to support the struggling property market, suggesting a gradual improvement. However, experts warn that the market's recovery remains uncertain in the long term.

New data reveals that the prices of new homes in China rose at a faster pace in November, suggesting potential stabilization in the country's beleaguered property market. According to the China Index Academy, a property research firm, the average price across 100 cities increased by 0.36% in November, up from 0.29% the previous month, with an annual growth of 2.40%.

While official home price data is anticipated from China's statistics bureau on December 16, the property market's longstanding downturn continues to weigh heavily on the nation's economic growth, having constituted about a quarter of economic activity at its peak in 2021. Recent actions by Chinese policymakers aim to revive market confidence, improve affordability, and ease home purchasing restrictions through measures like tax breaks and reduced down payments.

Despite these policy interventions, experts like Ying Wang from Fitch Ratings express caution. Wang points out that although there's marginal improvement in the real estate landscape since September's policy rollout, consistent market sustainability is questionable. Home prices may continue their decline until significant strides are made in corporate earnings, employment, and income outlooks, as Fitch maintains a negative credit perspective on China's real estate market through 2025.