Resale home prices drop at faster pace in China, private survey shows

BEIJING (Reuters) -China's resale home prices fell at a faster pace in June, highlighting the persistent weakness in the crisis-hit property market despite a slew of policy support measures, a private survey showed on Tuesday.

Resale home prices dropped 0.75% in June, compared with a 0.71% decline in May, and slumped 7.26% year-on-year from a 7.24% fall in the previous month, according to a survey by China Index Academy, one of China's largest property sector research companies.

New home prices also rose at a slower pace in June, increasing 0.19% compared to 0.30% in the previous month.

"The real estate market is still in the process of adjustment... a market stabilisation and recovery still require further policy efforts," the company said.

The property sector has been under severe stress since 2021, after authorities cracked down on excessive borrowing by developers. The regulatory moves triggered liquidity crises at major firms, resulting in unfinished projects, falling home sales, and mounting debt defaults.

Efforts to revive the sector have included cutting interest rates and rolling out incentives for homebuyers. However, weak consumer confidence and oversupply in some cities have limited the effectiveness of these measures.

Demand for new homes is likely to be less than 5 million units per year, significantly below the 2017 peak of 20 million units, Goldman Sachs said in a research note in June.

Chinese leaders at a cabinet meeting last month pledged to optimise policies to boost demand, improve supply, and stabilise the property market more effectively.

(Reporting by Liangping Gao and Ryan Woo; Editing by Shri Navaratnam)

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