China’s home prices declined at a slower pace in December 2024, signalling a potential stabilisation in the country’s real estate market following extensive government support measures. Official data revealed a 0.2% month-on-month drop in new home prices, marking a reduction in the pace of decline compared to the 0.4% fall in November.
The improvement comes as policymakers continue to implement initiatives to boost the property sector, a critical component of the world’s second-largest economy. Measures such as eased borrowing rules, reduced mortgage rates, and targeted financial support for developers have contributed to a more tempered downturn. The year-on-year figures, however, still highlight the challenges facing the market, with new home prices down 2.6% compared to the same period in 2023. While this represents an improvement from the 3.1% annual decline seen in November, it underscores the lingering impact of the sector’s prolonged slowdown.
China’s real estate market has faced significant headwinds over the past two years, including a debt crisis among major property developers and waning buyer confidence. These issues have resulted in stalled projects and declining sales, prompting concerns over broader economic repercussions. In December, sales volume for residential properties increased marginally, reflecting cautious optimism among buyers and a slow recovery in demand. Analysts view the December data as a positive step but caution that sustained recovery will depend on further policy support and improvements in consumer confidence.
Experts also warn that structural issues, such as high debt levels among developers and oversupply in certain regions, remain significant obstacles to long-term stability. The government is expected to continue implementing targeted measures in 2025 to address these challenges and ensure the sector remains a key driver of economic growth. While the December figures offer hope, the trajectory of China’s real estate recovery will likely be closely watched in the months ahead, particularly as global economic uncertainties and domestic pressures persist.
