BEIJING: China's home prices fell in November for a third consecutive month versus year-ago levels, Reuters calculations from official data showed on Thursday, pointing to an intractable property downturn despite government efforts to energise the market.
Average home prices in 70 major Chinese cities were down an annual 3.7 percent last month from 2.6 percent down in October, the biggest drop since Reuters started calculating nationwide housing prices.
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.
Yu Liang, president of leading residential developer China Vanke Co said at the weekend China was facing an inventory overhang that would take 13 months to clear.
The price fall came in spite of the government relaxing its lending rules in October and cutting interest rates in late November, intensifying fears that the slack property market, which accounts for about 15 percent of China's economy, could hold back economic growth.
Data last week that showed further signs of economic fatigue in China's economy, with factory growth and investment expansion slowing.
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 and furniture.
"We see GDP growth cooling further to 7 percent in Q4 2014, and to 6.8 percent in 2015 from 2014's anticipated 7.3 percent, as property-related headwinds offset any uplift from the US recovery or intensifying policy support," Tao Wang, China economist at UBS, said in a note.
NO QUICK REBOUND
The NBS data showed China's home prices fell 0.5 percent in November, easing from a month-on-month drop of 0.8 percent in October.
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."
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 the past 11 months, though still down 11.1 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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