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China's new home prices rise for second month in October: Survey

BEIJING: China’s new home prices rose for a second straight month in October, private-sector data showed on Wednesday (Nov 1), but analysts say more supportive measures will be needed in major cities to sustain the recovery.

Prices rose 0.07 per cent on average month-on-month, widening an increase of 0.05 per cent in September, according to a survey by China Index Academy, a real estate research firm.

New-home sales measured by floor area fell around 10 per cent in October, narrowing a 20 per cent slump the previous month, the firm said.

While the property recovery is still fragile, China Index Academy said support policies have increased with more steps expected, including easing home purchase curbs and reducing down payment ratios, mortgage rates and transaction taxes in some major cities.

The property sector, once a pillar of the world’s second-biggest economy, has been in a liquidity crisis since 2021, which has rattled global markets and prompted a slew of measures in recent months to reassure investors and homeowners.

China vowed to satisfy all developers’ reasonable financing needs regardless of ownership, with “equal treatment”, according to Central Financial Work Conference that concluded on Tuesday, a twice-a-decade policy meeting.

China Evergrande, which has more than US$300 billion of liabilities, is trying to stave off liquidation by revising its debt restructuring plan.

Evergrande, defaulted on its offshore debt in late 2021, becoming the poster child of a debt crisis that has since engulfed China’s property sector.

“The latest remarks from the National Financial Work Conference offer no surprise with no new concrete measure to mitigate sector risk. We stay cautious on the sector,” said economists at JP Morgan said in a research note.

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