China’s housing prices fell on a monthly basis for the seventh straight month in November, a survey showed Sunday, with the market yet to feel the full impact of an interest rate cut.
The average price of a new home in China’s 100 major cities was 10,589 yuan ($1,736) per square metre in November, down 0.38 percent from October, the independent China Index Academy said in a statement.
The fall was a slight improvement from the 0.40 percent month-on-month drop in October, previous figures showed.
“We expect the interest rate cut to kick in next year,” Bai Yanjun, research director for the China Index Academy, told AFP.
“We still believe the market is under downward pressure for the rest of 2014 because the current home inventory levels in first-tier and major second-tier cities are still high,” he said.
China cut both lending and deposit rates just over a week ago, and analysts said home mortgage buyers would be among the biggest beneficiaries.
“The rate cut sends a strong signal that the property market will likely bottom out soon,” China economist for Merrill Lynch Hong Kong, Lu Ting, said in a research note.
On a year-on-year basis, China’s new home prices fell 1.57 percent from the same month last year, far sharper that the annual fall of 0.52 percent in October, the academy said.
But for China’s ten biggest cities — which tend to have the most active property markets — new home prices rose 0.07 percent in November from October, marking the first gain after six months of declines, it said.
The commercial city of Shanghai was the best performing with housing prices rising 1.18 percent in November from October to 32,140 yuan per square metre, making it the second most expensive city behind the capital Beijing.
China had previously sought to rein in runaway property prices, a source of discontent among ordinary citizens, by introducing market control measures including limits on buying second and third homes.
But cities began rolling back some of the measures this year, as China’s economy slowed and the central government relented.
The surprise interest rate cut was the first in more than two years, raising expectations the central bank will carry out further monetary easing to keep the world’s second largest economy on track.
China’s central bank cut the benchmark one-year lending rate by 0.40 percentage points to 5.60 percent, and trimmed the one-year deposit rate by 0.25 percentage points to 2.75 percent.