Home prices in China last month rose at the slowest pace in almost two years as sales plunged late in the month, when the COVID-19 outbreak worsened dramatically.
New-home prices, excluding state-subsidized housing, rose 0.27 percent from December last year in 70 major cities, Chinese National Bureau of Statistics data showed yesterday.
That is the smallest gain since February 2018.
Photo: AP
Home sales “fell off a cliff” as efforts to combat the virus ramped up, China Real Estate Information Corp (中國房產信息集團) analyst Yang Kewei (楊科偉) said.
Entire cities, including Wuhan, where the virus originated, were locked down, and people restricted from returning home from Lunar New Year holiday travels.
The slowdown has probably worsened this month as the holiday was extended, developers closed showrooms and more cities went into lockdown.
New apartment sales plunged 90 percent in the first week of this month, preliminary data showed.
Developers might start reducing prices to boost sales and maintain cash flow, China Index Holdings (中指控股) research director Huang Yu (黃瑜) said.
Bigger declines might occur in the secondary home market, which is free of government intervention, she said.
China Evergrande Group (恒大集團), the third-largest developer by sales in the country, on Sunday that it would offer 25 percent discount for all properties on sale from today to Saturday next week.
Evergrande said it would also offer 22 percent discount for all properties on sale, including office and commercial properties, next month.
The company said at a news conference on Sunday that nearly 50,000 properties had been sold since it started online sales three days ago.
“The virus’ impact on property is potentially the biggest risk for the rest of 2020,” said Larry Hu (胡偉俊), head of China economics at Macquarie Securities Ltd in Hong Kong. “A fall in prices may lead to a self-strengthening downcycle.”
Additional reporting by Reuters
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