(Bloomberg) -- China’s home price declines eased for a second month in January, offering a rare sign of hope to the embattled property sector.
New home prices in 70 cities, excluding state-subsidized housing, fell 0.04% last month from December, when they dropped 0.28%, National Bureau of Statistics figures showed Monday. Values in the secondary market declined 0.28%, down for a sixth month.
Sentiment in China’s home market has been dented by a worsening liquidity crisis among real estate developers following a regulatory clampdown on excessive leverage. Zhenro Properties Group Ltd. late Friday become the latest developer to warn it may not meet its obligations, another negative surprise only weeks after it announced plans to redeem a perpetual bond.
“Homebuyers are still in a heavy wait-and-see mode after price cuts in December extended to the New Year,” said Chen Wenjing, associate research director at China Index Holdings. “Many cities will likely remain lackluster this month.”
Chinese authorities have been racing to arrest the property slowdown, which has been hurting growth in the world’s second-largest economy. Banks in several Chinese cities have cut mortgage down payments for some homebuyers, according to local media, in a move that may boost flagging housing demand.
Still, the outlook remains bleak. Yu Liang, chairman of China Vanke Co., one of the country’s largest developers, urged staff to prepare for a battle that could make or break the firm, the South China Morning Post reported last week. Global credit rating firms are withdrawing their assessments on property bonds, while a string of auditor resignations is adding to doubts over financial transparency weeks before earnings season.
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