China's home prices continue to ease in May

BEIJING, June 16 (Xinhua) -- China's home prices in 70 large and medium-sized cities continued the downward trend in May, though the pace of decline slowed, the National Bureau of Statistics (NBS) said Thursday.

In May, 43 out of the 70 cities saw a month-on-month drop in new home sales prices, down from 47 in April, data from the NBS showed.

New home prices in four first-tier cities -- Beijing, Shanghai, Shenzhen and Guangzhou -- edged up 0.4 percent month on month in May, widening 0.2 percentage points from that in April.

A total of 31 second-tier cities witnessed a month-on-month decline of 0.1 percent in new home prices, while 35 third-tier cities saw a month-on-month decline of 0.3 percent in new home prices.

Prices of resale homes in the four first-tier cities remained unchanged month on month in May. Second-tier and third-tier cities saw their prices of resale homes edge down 0.3 percent and 0.5 percent on a monthly basis, respectively.

The NBS data also showed that 46 out of the 70 major cities saw a year-on-year decline in the new home prices, and 57 cities reported falling resale home prices from a year earlier.

"The month-on-month decline in housing prices seems to be contained in May, mainly because of the stimulus measures taken by the governments to stabilize the slowing property market," said Yan Yuejin, research director at E-house China R&D Institute.

Since the beginning of this year, factors such as COVID-19 resurgences have dented the confidence of home buyers and housing transactions have shrunk.

To turn around the contracting housing market, the central bank last month cut its benchmark rate for mortgages, several days after it lowered the mortgage rate floor for first-time home buyers.

In May, a number of cities also implemented easing measures including smaller down payments and relaxation in purchasing rules to support the sector, a key economic growth driver.

"Stabilizing measures aiming to stimulate people's home demand and lower mortgage rates working to reduce residents' burdens all helped prop up the market," said NBS spokesperson Fu Linghui.

Fu said he believes that with the property market picking up, it will play a bigger role in driving economic growth in the second half of the year.

"To promote the healthy development of the property sector, China must, on the one hand, maintain the principle that 'housing is for living in, not for speculation' and on the other, meet residents' reasonable housing needs," Fu said.