China’s new home prices slow in November as tightening steps cool market

December 14, 2020

BEIJING (Reuters) – New home prices in China grew at a slower monthly pace in November, official data showed on Monday, with tightening policies continuing to cool the market in larger cities while some smaller towns saw prices fall as demand waned.

Average new home prices in 70 major cities rose 0.1% in November from the previous month, the slowest pace since March when the market was battered by coronavirus-induced lockdown measures, Reuters calculated from National Bureau of Statistics (NBS) data. That compared with 0.2% on-month growth in October.

Prices rose 4.0% in November from the same month a year earlier, the weakest rate since February 2016. That compared with a 4.3% on-year increase in October.

China’s property market has recovered quickly from the COVID-19 pandemic, with home sales and investment growing at a robust pace, prompting the government to step up efforts to deleverage the highly indebted sector to curb financial risk.

However, price rises are uneven and concentrated in clusters in the southern Pearl River Delta and eastern Yangtze River Delta. In the north, some cities have seen demand slump after an initial spurt.

The NBS data also showed the number of cities reporting monthly price increases for new homes fell to 36 out of 70 from 45 in October.

China’s banking regulator recently highlighted the property sector as a significant risk to financial stability, calling it the biggest “grey rhino” – an obvious yet ignored threat.

(Reporting by Lusha Zhang, Liangping Gao and Ryan Woo; Editing by Christopher Cushing)

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