DgcityNew-home prices across 100 major Chinese cities rose modestly in October while secondhand-home prices fell again, underscoring a property market that is stabilizing only in patches, with wealthy buyers in Beijing and Shanghai propping up the national figures.
The average price of a new home in the 100 cities tracked by China Index Academy reached 17,316 yuan per square meter, up 0.18 percent from September and 2.02 percent higher than a year earlier. Prices of existing homes, by contrast, slipped 0.61 percent on the month and were down 6.72 percent year on year, with declines spreading to 98 of the 100 cities surveyed.
The divergence reflects what developers are choosing to build. In Beijing, Shanghai and a handful of other top-tier cities, developers have rushed premium projects to market, betting that better-off families will pay for quality even as overall demand stays weak. New-home prices in the four first-tier cities rose 0.41 percent on the month and 5.08 percent from a year earlier, while prices in smaller third- and fourth-tier cities edged down.
Transaction volumes told a slightly more encouraging story. Sales of new homes in Beijing rose 24 percent by area compared with October last year, and Shanghai gained 4 percent, although sales in Guangzhou and Shenzhen declined. Across 18 major cities, secondhand transactions jumped 17.5 percent, with Shanghai posting its strongest October for resale deals in roughly a decade. Buyers are active, in other words, but only when sellers cut prices enough.
A new mortgage subsidy that took effect October 1 is helping shape that pattern. First-time buyers of smaller, lower-priced homes can receive a one-percentage-point interest discount for up to five years, a benefit that has shifted activity toward cheaper properties and pulled average transaction prices down even as deal counts rise.
Developers, meanwhile, are pulling back hard on supply. New-home launches in 50 major cities fell to their second-lowest October level in three years, and land-sale revenue remains sharply below last year, a combination that should eventually reduce the overhang of unsold inventory. Analysts expect the market to keep bottoming out through year-end, with policy support preventing a sharper slide but no nationwide rebound in sight until buyer confidence in job security and future prices returns.
