China home prices fall for 37th straight month

China's new home prices fell 0.1% in July from the previous month, matching June's decline and extending a yearslong property downturn now stretching 37 consecutive months, according to data released by the National Bureau of Statistics on Monday. On an annual basis, prices dropped 3.2%, narrowing slightly from a 3.3% decrease in June.reuters+1

The data landed alongside a broader batch of disappointing economic figures, with retail sales growing just 0.6% year-on-year versus expectations of 1.5%, and industrial output slowing to 4.5% growth against forecasts of 4.8%.investinglive

First-Tier Cities Lose Momentum

The recovery in China's largest cities stalled in July. New home prices in the four first-tier cities — Beijing, Shanghai, Guangzhou, and Shenzhen — were flat on average from June, ending a four-month rebound, according to the South China Morning Post. Shanghai and Shenzhen posted modest gains of 0.2%, and Guangzhou edged up 0.1%, but Beijing saw prices fall 0.3%.scmp+1

Analysts attributed the weakening to seasonal headwinds and an unusually rainy summer. Second-tier cities reversed June's flat reading with a 0.1% monthly decline, while third-tier cities dropped 0.3%.whbl

"The overall market has yet to emerge from its adjustment cycle," said Zhang Dawei, analyst at Centaline Property, describing the pattern as a "K-shaped recovery" in which only select major cities show resilience.whbl

Investment and Demand Remain Weak

Property investment fell 19.2% year-on-year in July, deepening from an 18% decline the prior month. Property sales, investment, and new construction starts all fell at a faster pace in the first seven months of the year, Reuters reported.investinglive+1

Of the 70 cities surveyed, only 17 recorded month-on-month price gains in July, according to Reuters calculations, while the SCMP reported 23 cities saw increases or flat readings.whbl+1

Yan Yuejin, vice-president of E-house China Research and Development Institute, said the latest data "show marginally deeper declines, pointing to more pressing needs to stabilise their housing markets."scmp

Policy Response Falls Short

China's top leadership pledged in late July to support the economy with faster fiscal spending but stopped short of delivering major new stimulus for housing. Beijing in early August further relaxed home-buying curbs, allowing more households to purchase in the city's central area and expanding access to provident fund mortgages.whbl

The weak data arrived after Q2 GDP growth slowed to 4.3% year-on-year — the weakest since 2022 — raising pressure on policymakers to act more aggressively as domestic demand conditions remain subdued.investinglive+1