China’s new home prices fell for the eighth consecutive month in April from a year earlier but were flat from March, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out. However, analysts warned that any recovery in the market will take some time, given a huge inventory of unsold homes and a slump in real estate investment growth to the lowest levels since the global financial crisis.
Average new home prices in China’s 70 major cities dropped 6.1 percent last month from a year ago, the same rate of decline as in March, Reuters calculated from official data published on Monday. But prices were flat from March, further narrowing from a 0.1 percent fall in the previous month. “The data are signaling an obvious bottoming out,” said Gavekal Dragonomics economist Rosealea Yao in Beijing, adding the secondary market was leading with a 1.1 percent annualized monthly rebound.
“But it won’t be a strong rebound for sales and construction due to still high inventory levels.” Following a relaxation of tax rules and easier downpayment requirements on second homes in late March, the central bank earlier this month cut interest rates for the third time in six months to lower companies’ borrowing costs and reenergize the sputtering economy.