New home prices in China rose by 0.25 percent month-on-month in May due to multiple measures to support the country’s real estate sector. The latest data from the China Index Academy reveals that the average home prices across 100 cities saw an increase in May following a 0.27 percent rise in April.
The report also reveals that second-hand residential property prices decreased by 0.70 percent month-on-month and 5.80 percent year-on-year. Meanwhile, the average rental price in 50 cities saw a 0.30 percent month-on-month and 1.50 percent year-on-year decline.
China’s real estate sector has been on a downward trend since 2021 due to liquidity pressures and high inventory levels. In a historic step in May, the government took a significant step to stabilize the real estate sector with the central bank facilitating $138 billion in funding to ease mortgage rules and boost government purchasing of property.
The China Index Academy reveals that the central bank and the National Financial Regulatory Administration have issued several measures including decreasing the down payment ratio and mortgage interest rate. Moreover, the central government has put forward the latest deployment to take in the existing real estate inventory.
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The government will also reduce the land supply in some cities, while some cities including Hangzhou, Xi’an and Zhuhai have lifted purchase restrictions to stimulate demand. In addition, Shenzhen and other provinces and cities have reduced the down payment ratio and the lower limit of commercial loan interest rates.
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