China home prices fall for 11th straight month as suspended construction, mortgage boycott and weak economy hit sales

70-city index of new home prices in July dropped 0.1 per cent from June and 1.7 per cent year over year, according to the National Bureau of Statistics

Lower-tier cities took the brunt of the decline, as first-tier cities saw prices increase for both new and secondary-market homes

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Residential buildings under construction at Tahoe Group’s Cathay Courtyard development in Shanghai, on July 27, 2022. Photo: Bloomberg

Published: 4:00pm, 15 Aug 2022

Home prices in China dropped for the 11th straight month in July, reflecting the woes of a property market suffering amid a developer debt crunch, an unexpectedly weak economy, a massive surplus of empty homes and a mortgage boycott by homebuyers fed up waiting for unfinished housing projects.

China’s 70-city index of home prices dropped 0.1 per cent compared with June and 1.7 per cent year over year, the National Bureau of Statistics reported on Monday.

New home prices dropped in 40 cities and secondary-market prices fell in 51 cities, an increase of two and three cities, respectively, compared with June, the data showed.

Lower-tier cities suffered more than their more populous counterparts. In fact, first-tier cities – Beijing, Shanghai, Shenzhen and Guangzhou – saw new-home prices increase by 3.1 per cent and secondary-market prices increase by 0.9 per cent year-on-year. In contrast, new and secondary-market prices declined by 0.5 per cent and 2.5 per cent in second-tier cities and by 3.2 per cent and 3.9 per cent in third-tier cities, respectively.