China Real Estate Prices Post Biggest Drops to Date During November

In case anyone was still unclear which direction China’s residential real estate market is heading, data released by the National Statistics Bureau this weekend showed real estate prices dropping the most this year during the month of November.  Perhaps more remarkable is that the price drops have spread well beyond the first-tier cities, with 49 of the 70 cities surveyed registering price reductions during the month.

In a story from Bloomberg, reporter Bonnie Cao noted that:

New home prices dropped from the previous month in 49 of the cities monitored by the government, compared with 33 posting decreases in October, the national statistics bureau said in a statement on its website today. Only five cities had gains in home prices, according to the statement.

“It’s more and more clear that home prices are falling around the country,” said Shen Jian-guang, a Hong Kong-based economist at Mizuho Securities Asia Ltd. “It’s still the critical stage of China’s property curbs, so the government doesn’t want to send any signals of easing of those policies too early as it may reverse the trend.”

New home prices in China’s four major cities of Shanghai, Beijing, Shenzhen and Guangzhou each retreated 0.3 percent from October, the biggest monthly falls for these metropolitan areas this year, according to data from the statistics bureau.

The eastern port city of Ningbo and Shenyang in the north close to the North Korean border posted the biggest month-on- month declines of 0.6 percent, while Guiyang in the southwest rose 0.2 percent, the most among the 70 cities.

This latest data confirms what many private observers and economists have been saying for weeks,  which is that, with no signals of the market controls being relaxed, market confidence in China’s residential real estate market seems to have finally headed downhill.