China’s Troubled Property Market Continues to Struggle: Home Prices Slump in Major Cities

China’s troubled property market continues to struggle as home prices in major cities remain in a two-year slump, with buyers hesitant to make a move while developers face ongoing challenges. According to a report from China Index Academy, second-hand home prices in 100 mainland cities dropped 4.8% year-over-year to 15,088 yuan per square meter in March, with prices declining in 98 cities from the previous month.

Yan Yuejin, director of E-house China Research and Development Institute, noted that there is an oversupply of pre-owned homes in the market, forcing sellers to offer significant price cuts to attract buyers. This downward trend in prices has persisted for several months, indicating the fragility of China’s housing market and the reluctance of potential buyers.

Some of China’s leading developers, including China Vanke, Country Garden, and Wanda, have faced liquidity challenges as debts come due, further dampening market sentiment. The top 100 property developers in the nation reported a 46% drop in combined sales in March compared to the previous year, reflecting the broader challenges in the sector.

Despite the overall decline in second-hand home prices, new home prices in the 100 cities saw a slight increase in March, suggesting a shift in market dynamics. Yan at E-House pointed out that the adjustment in prices reflects a structural change in supply and demand, which could ultimately benefit homebuyers as market bubbles deflate.

While the market remains uncertain, there is optimism that improved liquidity could drive up demand for new homes in the coming months. The report also highlighted that higher quality projects in March helped support prices and attract buyers, indicating potential resilience in the market amidst ongoing challenges.