According to official data from China, the prices of new homes in the country increased in January. This is the first time that such an increase has been witnessed in almost one year.
This comes at a time when China has ended its zero-covid policy and adopted property-friendly policies. In addition, there are also talks of a potential stimulus in the pipelines, which is boosting the demand for new houses.
During January, an increase of 0.1% m/m was seen in new home prices across China. In December, the new home prices were actually down by 2%, which tells us that the situation has improved a lot for the Chinese housing market. On a y/y basis, the prices of new homes have dropped by 1.5%, making it the 9th month in a row.
Overall, most of the major cities in China saw an increase in house prices. In December, the price increase was only seen in 15 cities only. But in January, that number has now increased to 36 cities.
At one time, the property sector was regarded as the engine of the Chinese economy. But over the last few years, it has lost its charm due to rising debt defaults and a fragile demand.
To support the declining housing market, the Chinese authorities have introduced various stimulus packages since last year.
Although sentiment has improved a lot, the need for more stimulus measures by the Chinese government is still needed. Without that, the chances of a strong recovery in the Chinese housing market are very slim!
According to analysts, China will be rolling out additional easing measures in the near future to add more charm to the housing sector. As for the timing, it can either happen during the annual parliament meeting or after it.
The said meeting of parliament members is scheduled to happen somewhere around March 2023.