(Bloomberg) — China’s home prices fell at a faster pace in May, as the country’s most forceful efforts to support the property market took time to revive demand.
New-home prices in 70 cities, excluding state-subsidized housing, slid 0.71% from April, the most since October 2014, National Bureau of Statistics figures showed Monday. Values of existing homes dropped 1%, the sharpest decline since at least 2011 when China started using the current data collection method.
China last month unveiled a broad real estate rescue package to address the biggest cloud over China’s economy, relaxing mortgage rules and encouraging local governments to buy unsold homes. Three of the nation’s biggest cities — Shanghai, Shenzhen and Guangzhou — have since rolled out major easing for homebuyers, slashing downpayment requirements and allowing room for cheaper mortgages. Capital city Beijing has remained unmoved.
But investors and analysts remain skeptical that the measures will be sufficient due to the limited central bank funding revealed so far and the slow progress of existing trial programs in several cities. Housing oversupply has been dragging prices lower, giving people less reason to invest in property.
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Wall Street economists are predicting new measures and additional funding in Beijing’s bid to shore up the market, after top policymakers urged officials in a cabinet meeting earlier this month to keep an “open mind” over policies to reduce housing inventory and be more “creative and bold” in rolling out supportive measures.
Also Read: China mulls government purchases of unsold homes to ease glut
JPMorgan Chase & Co. property analyst Karl Chan expects further easing of restrictions on home purchases. HSBC Holdings Plc economists including Jing Liu predict more measures to destock inventories. New steps are especially likely if the property market doesn’t improve further in the coming months, according to Goldman Sachs Group Inc. economist Hui Shan.
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