Prices of residential properties in China fell in January, making it the fourth consecutive month where values have fallen. This shows that the policy-driven property sector downturn is deepening, adding to concerns of a hard landing in the world’s second-largest economy.
Average prices of new homes across China fell 0.2 percent in January from the previous month, against a 0.3 percent decline in December and a 0.2 percent decrease in both November and October, according to Reuters.
Values slid month-on-month in January for 47 out of the 70 cities tracked by the National Bureau of Statistics, and remained unchanged for the rest. Wenzhou, a speculative market that was recently hit by a private financing crisis, witnessed a 0.6 percent price drop, the highest among all the cities.
This data contrasts sharply with January 2011, when prices of new residential properties fell in only three cities out of the 70 monitored.
Mounting inventories and spreading home price falls have compelled developers to slow down their land acquisition and construction, affecting the revenue of local governments and their ability to inject more money into the cooling economy.
Investors are concerned that a slump in China’s property sector may force its economy into a hard landing if the central government does not relax its cooling measures in a timely manner.
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