China’s home prices extend decline in July amid persistent property slump

Home prices in China continued to decline in July as falling property investment and sluggish sales prolonged the downturn in the country’s real estate sector, official data showed Monday.

New and secondhand home prices fell year-on-year in most of the 70 large and medium-sized cities monitored by China’s National Bureau of Statistics.

Prices for new homes dropped 1.1% from a year earlier in the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen.

They decreased 2.8% across 31 second-tier cities and 4.2% in 35 third-tier cities.

Shanghai, China’s most populous city, was the only first-tier city to record an annual increase, with new home prices rising 3%.

On a monthly basis, new home prices in first-tier cities fell 0.1%, ending a four-month recovery trend.

The downturn was more pronounced in the secondary market. Secondhand home prices declined 3.7% year-on-year in first-tier cities, 5.1% in second-tier cities and 5.8% in third-tier cities.

New home prices in China have fallen on an annual basis since April 2022 as the property sector struggles with weak demand, declining investment and financial difficulties among major developers.

The prolonged housing downturn has weighed on household confidence and the broader economy because the property sector has historically been a major driver of Chinese investment and growth.