China’s faltering real estate market saw a marked downturn in May, with new-home prices dropping at a fastest pace in seven months, highlighting the growing urgency for authorities to support the sector.
According to data released by the National Bureau of Statistics, new residential property values in 70 major cities, excluding state-backed housing, fell 0.22% from the previous month, accelerating from a 0.12% decline in April. Prices of existing homes registered an even steeper fall of 0.5%, the sharpest monthly drop since last year.
The figures indicate the limited impact and fading momentum of last autumn’s stimulus efforts, which initially helped stabilize the market but have since lost steam. Even a temporary pause in US tariffs has failed to offset sluggish domestic demand, as continued deflation in housing weighs on business profits and household incomes.
Potential homebuyers are staying on the sidelines—many expecting prices to fall further—creating a stubborn drag on sales activity.
Analysts at UBS Group AG, led by Ning Zhang, noted in a recent report that the downturn is likely to spill over into 2025, though the contraction may soften compared to this year.
Premier Li Qiang, speaking at a State Council meeting last Friday, pledged renewed action to prevent the real estate sector’s decline from deepening, according to state broadcaster CCTV. After similar statements from top Chinese officials last September, Beijing rolled out a stimulus campaign, though market challenges have persisted.
State media reported on Monday that China’s central government will step up coordination of current and future fiscal and monetary measures to support the property sector.
