BEIJING Reuters -- New home prices fell for the third month in September as a mortgage boycott across the country and a slowing economy discouraged potential home buyers, a private survey showed on Saturday.
China's property market crisis worsened this summer, with official data showing home prices, sales and investment falling in August, adding pressure on the world's second-largest economy, which barely grew in the second quarter.
According to a survey by China Index Academy CIA, prices in 100 cities fell 0.02% in September from a month earlier, after declines of 0.01% in July and August.
The survey showed that 56 cities posted a decrease in monthly prices compared to 69 in August.
The National Bureau of Statistics will release official home prices for September on October 19.
The chill in the sector was caused by a number of overleveraged developers defaulting on bonds and failing to complete projects or even start new ones, prompting many homebuyers to stop repaying mortgages and keeping a lid on demand for new homes.
Sporadic COVID 19 lockdowns have dampened consumer confidence, while job losses and weak economic growth have made many more cautious about their spending.
In order to prop up the distressed sector, many small cities have taken steps this year, such as reducing down payments, cutting mortgage interest rates, and offering better terms for households with more than one child.
The central bank said that local governments will be able to relax the floor on mortgage rates for first-time home buyers in some cities in phases.
In the fourth quarter, local governments can expect to implement measures to shore up their respective markets while guarding against speculative purchases, said Cao Jingjing, a CIA analyst.