BEIJING, January 18 (TMTPOST)— New home prices in 62 cities of 70 major cities in China registered a month-on-month drop while existing home prices declined in all 70 cities in December, according to the data for 70 major cities relased by the National Bureau of Statistics (NBS) on Wednesday.

The existing homes prices took a collective dive in December for the first time in three months. Despite signs of a gradual and uncertain recovery, confidence in the market continues to be elusive.

Since a downward trend began in June, new home prices in 70 cities have fallen for six consecutive months. Property developers continue to adopt a strategy of price reductions for new homes to boost sales, resulting in price rises in Beijing, Shanghai, and some provincial capitals.

In December, the average month-on-month decline in new home prices across these cities reached 0.45%, with a steeper drop compared to the previous month. On a year-on-year basis, the decline in December was 0.89%, marking 21 consecutive months of year-on-year contraction. The prolonged market stagnation has prompted major property developers to offer larger discounts and price cuts, in a hurry to address operational issues and achieve annual targets.

The total sales area for commercial housing in 2023 fell 8.5% year-on-year to 1.12 billion square meters. The sales revenue of commercial housing stood at 11.7 trillion yuan (US$ 1.65 trillion), reflecting a 6.5% year-on-year decline. While December saw a surge in sales area and a decline in average selling prices, the inventories were reduced for property developers.

New home prices in all tiers of cities experienced a month-on-month decline. In particular，first-tier cities witnessed a year-on-year decline for the first time in 66 months.

In December, the month-on-month decline in new residential sales prices in first-tier cities was 0.4%. Beijing’s new housing price remained flat, while Shanghai saw a 0.2% increase, and Guangzhou and Shenzhen experienced declines of 1.0% and 0.9%, respectively. Second and third-tier cities also witnessed month-on-month declines of 0.4% and 0.5%, respectively, which represented 0.1 percentage point more than the declines in November.

Out of the 70 cities, only seven experienced a month-on-month increase in new home prices in December. They include Beijing and Shanghai, the two first-tier cities, which benefited from the new housing policy introduced on December 14, 2023.

Additionally, the market in certain provincial capital cities, such as Chengdu, Xi'an, and Taiyuan, demonstrated relative resilience in the face of a prevailing price downward trend.

Despite a shared decline in existing home prices in 70 cities, Chengdu’s existing home prices rose 0.5% year on year, making it the only city to register a year-on-year increase.

Industry experts attribute these declines to high inventories, leading many homeowners to adopt a more flexible pricing strategy. Although existing homeowners are not as hurried as developers rushing to recover funds through volume-based pricing, many homeowners have changed their mindset to accept lower price offers.