Property slump continues to impact on Chinese growth

Analysts dash hopes of quick recovery in Chinese property market despite price rises in Beijing and Shanghai

The average price of a new home in China’s 70 major cities dropped 6.1% last month from a year ago.

Analysts dash hopes of quick recovery in Chinese property market despite price rises in Beijing and Shanghai
Analysts dash hopes of quick recovery in Chinese property market despite price rises in Beijing and Shanghai

It is the eighth consecutive month that property values in the world’s second-largest economy have been below levels from the same month in 2014.

Although official data reveals that Chinese property values in April were flat when compared with March, analysts say any recovery in the market will take time.

They point to the large number of unsold homes in China and warn that the property sector is the biggest risk to the country’s economy, which is set for its worst year in a quarter of a century.

While property values in Beijing and Shanghai are edging up, according to official figures, prices in smaller cities – which make up 60% of housing sales in China – continued to fall.

That will keep pressure on policymakers for more interest rate cuts and to implement other measures to stimulate activity.