BEIJING: China's new home prices fell again in November and a business survey showed a deep drop in real estate investment plans, adding gloom to a slumping property market that has so far defied government efforts to revive it.
Average home prices in 70 major Chinese cities fell by an annual 3.7 percent last month following a 2.6 percent fall in October, the biggest drop since 2011 and a threat to economic growth.
Yu Liang, president of leading residential developer China Vanke Co said at the weekend that China now faced a housing glut that would take 13 months to clear.
Researcher China Beige Book said on Thursday its survey of 2,000 companies showed an eye-watering 26 percentage point fall in intentions to invest in real estate in the fourth quarter.
China's real estate market has been plagued by falling prices and high inventories in recent months, crimping demand in 40 economic sectors ranging from steel to cement to furniture.
The property price news followed data last week that showed factory growth and investment expansion slowing, leading to calls for more government stimulus measures and a cut in banks' reserve requirements - allowing them to lend more.
But Tao Wang, China economist at UBS, said property-related headwinds would offset any benefit from increased Chinese government support or the pickup in U.S. economic growth.
"We see GDP growth cooling further to 7 percent in fourth quarter 2014, and to 6.8 percent in 2015 from 2014's anticipated 7.3 percent," she said.
NO QUICK REBOUND
The price fall came in spite of the government relaxing its lending rules in October and cutting interest rates in late November.
Vanke's Yu said the rate cut and regulatory easing had helped the market, but "it's hard to say the industry is recovering at this stage".
The National Bureau of Statistics data showed new home prices fell year-on-year in 68 of the 70 major cities it monitors, up from 67 in October.
On a month-on-month basis, home prices fell 0.5 percent in November, the seventh consecutive monthly fall, but at a slower pace than the 0.8 percent dip in October.
While the housing market is expected to remain weak well into next year, it is showing some tentative signs of bottoming out.
Official data last week showed property sales hit 132.2 million square metres in November, the highest level in 11 months, though still down 11 percent from a year earlier.
"The recovery momentum is still weak," said a senior executive at a mid-sized listed developer in Beijing, noting the market may have already found the bottom of the cycle. "The property market should not get worse in future," he said.
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