China's housing market continues to decline, with new home prices falling for the seventh consecutive month in January, according to data released by the National Bureau of Statistics (NBS). Month-over-month, prices dropped by 0.3%, following a 0.4% decrease in December.
Compared to the same period a year ago, new home prices have plunged by 0.7%, the steepest decline in 10 months. This persistent downward trend reflects the ongoing challenges faced by China's property market, which has been weighed down by over-leveraged developers and a subsequent series of defaults since 2021.
In an attempt to curb the downturn, Chinese policymakers have implemented various measures, including instructing state banks to increase lending to eligible residential projects. Additionally, some major cities have relaxed purchasing restrictions to entice homebuyers.
However, the impact of these measures on home prices may be limited. The central bank's recent reduction in the benchmark mortgage rate, the largest ever, is unlikely to have a significant effect, as existing mortgage holders will only benefit from lower rates next year.