Prices of New Homes Falls as Government Releases New Stimulus
The average prices of new homes in China continues to fall in March but is narrowing which is expected to continue as the stimulus that the government released is bolstering sales volume. In 70 major cities prices have dropped 6.1 percent last month compared to a year ago, this will be the seventh consecutive month fall after February 5.7 percent decline.
The monthly fall in March to February was at 0.1 percent narrowing from a 0.4 percent fall with Beijing having eight consecutive drops and rising only 0.3 percent as prices continue to stabilize. While China’s gross domestic product grew in its slowest pace it build up expectations that authorities will create more policy stimulus to stop an even sharper slowdown.
The real estate investment growth in China for the first quarter slowed down to an 8.5 percent compared to the year earlier the lowest it has been since 2009. During this time developers were on clearing excess inventory and property sales volume declined down to 9.2 percent. Although price recovery will be slow but is weighed by inventory that is still at its high level especially in lower tier cities were in developers are cutting prices to reach sales targets.