A tentative sign of stability in China's property market: the rate of deflation in new home prices held steady last month, breaking a multi-month trend of deterioration.
New home prices in 70 cities fell by an average 6.1 per cent year-on-year last month, based on calculations by Reuters from official data published by China's National Bureau of Statistics. In April, they had also deflated at a record pace of 6.1 per cent. Records go back to 2011.
Because of a high base from early last year, the year-to-year drops are looking stark. The index has been deflating for eight months now.
But on a monthly basis the trend looks less worrying. Of the 70 cities tracked, 47 recorded falls last month. Over 12 months, 69 cities experienced a fall.
In Beijing prices were down 3.2 per cent year-on-year, versus -3.7 per cent in March. In Shanghai prices slipped 4.7 per cent, from 5 per cent in March.
Since November the PBoC has cut benchmark interest rates three times in an effort to stimulate the slowing economy and propel spending in a housing market suffering from inventory overhang. In March it also lowered the minimum downpayment required on second homes.
The moves have had some effect. China's National Bureau of Statistics said new home sales rose 16 per cent year-on-year in April. But we've yet to see prices reverse.
