Housing prices in 70 large and medium-sized cities across China declined at a more reasonable pace in May from the previous month thanks to a series of supportive measures to stabilize the market, and the sector's stabilization is coming soon, said industry experts.
Compared with the same period last year, housing prices in 70 cities either grew at a slower pace or declined more in May, said Sheng Guoqing, chief statistician with the National Bureau of Statistics' urban division.
Of the 70 major Chinese cities tracked by the NBS, 43 saw new home sales prices decline month-on-month in May, four less than that in April, and the number of cities reporting year-on-year price falls increased by seven to 46, the NBS said on Thursday.
"The most distinctive characteristic of the data is that the month-on-month decline is being checked, which is closely linked to the measures stabilizing the property market, suggesting the sector is in fact getting stabilized," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.
Local governments have introduced supportive measures more frequently and in more depth in May to protect rational home demand, said Chen Xiao, senior analyst with the Zhuge Real Estate Data Research Center.
The country's central bank last month lowered the over-five-year loan prime rate, on which many lenders base their mortgage rates, by 15 basis points to 4.45 percent, which means personal home mortgage loan interest rates for first-time homebuyers fell to as low as 4.25 percent.
The policy easing for the property sector has helped boost market confidence and home prices, particularly for new home transactions, Chen said.
"Signs of market stabilization have appeared, and the favorable policies are encouraging many homebuyers," said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.
However, regardless of the number of policies, the nation's top-tier cities have largely left their existing basic measures unchanged, Zhang said.
In addition, the impact of COVID-19 remains serious in some Chinese cities including Shanghai, and disrupted market recovery, Zhang added.
The pre-owned home market, with fewer policies in place, is under more downward pressure, according to the NBS data.
In 53 cities, existing home prices declined month-on-month in May, three more than in April. And 57 cities recorded a decrease in prices year-on-year, one more than that of a month earlier.
Li Yujia, chief researcher at the provincial residential policy research center of Guangdong province, believes the stabilization of first- and second-tier urban housing markets will lead to the market recovery in more cities, and the recovery of market demand will first help stabilize pre-owned home sales, followed by new home transactions.