China struggles to lift home prices as April shows no growth

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BEIJING (Reuters) – China’s new home prices were unchanged in April from a month earlier for a second month, official data showed on Monday, extending the no-growth trend to nearly two years despite policymakers’ efforts to stabilise the sector.

New home prices have shown no growth since May 2023 as China attempts to lift the real estate sector, once a key driver of the economy, from a prolonged slump.

From a year earlier, prices in April were down 4.0%, a slight improvement from a 4.5% decline last month, data from China’s National Bureau of Statistics showed.

Beijing has announced a raft of stimulus measures in recent weeks to bolster the economy amid trade uncertainties with the U.S., including trimming mortgage costs for some buyers to turn around a property crisis that began in 2021.

Indebted developers have since struggled to repay their borrowings and deliver pre-sold homes, dampening confidence in the sector.

Resale home prices declined across tier-one, tier-two, and tier-three cities on both a monthly and annual basis.

Separate official data showed property investment dropped 10.3% year-on-year and sales by floor area shrank 2.8% in January-April.

The head of China’s financial regulator promised to roll out more measures to help sustain the “stabilising trend of the property sector” at a high-profile press conference earlier this month.

Meanwhile, the central bank cut the interest rate for housing provident fund loans by 25 basis points, effective May 8, reducing borrowing costs for some buyers.

(Reporting by by Liangping Gao, Xiuhao Chen and Liz Lee; Editing by Christian Schmollinger and Saad Sayeed)