The fall in home prices is China is accelerating with 67 of 70 cities showing weaker prices compared to a year ago, raising further fears of a weakening economy.
Nationally, new home prices are down 2.6% over the 12 months to October and lower by 1.3% compared to September.
The worry is that a weakening property market could be a further drag on China’s economic growth.
This is already feeding in to a weaker consumer outlook with respondents to the MNI China Consumer Sentiment Survey expressing considerable caution on near-term prospects.
Chinese authorities in September announced housing stimulus measures including discounted mortgage rates, and fewer restrictions on investors.
It’s still too early to judge the impact of the package but any fall in construction in China means weaker demand for Australian iron ore which would be used to make steel for buildings. (The iron ore price hit another five-month low overnight.)
This is the sixth monthly fall in a row, according to numbers released by the National Bureau of Statistics.
Hong Kong’s Hang Seng index has fallen on the news, down 0.59% to 23,656.00.
In Beijing prices are down 1.1% from September and Shanghai was 0.6% lower.
Real estate makes up about a quarter of the China’s urban investment and has been outpacing China’s GDP growth. Market economists say development has been so fast that China is now facing a supply glut.