SHANGHAI, Oct. 1 (Reuters) – New home prices in China rose slightly in September, breaking a four-month decline, with developers accelerating launches to take advantage of a series of recent support measures, data showed on Sunday.
Prices rose 0.05% on average from the previous month after falling since May, according to a survey by China Index Academy, a real estate research firm. Only 30 of the 100 cities surveyed reported a decline in new home prices.
The company said in a report that it is the largest monthly increase since October 2021, driven by developers launching new, high-quality housing projects.
Confidence in the real estate sector, which accounts for a quarter of economic activity, has been damaged since 2021 when Beijing cracked down on debt accumulation by developers, fueling the debt crisis. The worsening problems in the sector this year affected the second largest economy in the world and shook global financial markets.
China has announced a range of measures in recent weeks to boost homebuying sentiment, including relaxing some borrowing rules and easing restrictions on homebuying in some cities.
These policies have given big cities like Beijing a slight boost in new home sales, but some worry the improvement may be short-lived and could lead to demand drying up in smaller cities.
If these policies continue to improve, the market in first-tier cities is likely to stabilize in this quarter while recovery in smaller cities may take longer, the report said.
China Evergrande Group (3333.HK), the world’s most indebted property developer with liabilities of more than $300 billion, said on Thursday that its founder was under investigation for suspected crimes.
(Reporting by Brenda Goh and Liangping Zhao – Prepared by Muhammad for the Arabic Bulletin) Editing by William Mallard
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