China Home Prices Hold at -3.5% as Stimulus Fails to Lift Market

China's new-home prices fell 3.5% in May from a year earlier, matching April's decline and extending the longest stretch of annual drops since the property downturn began in 2021, the National Bureau of Statistics said Monday.

The flat reading masks a widening gap between top-tier cities and smaller ones. Beijing and Shanghai posted smaller declines, helped by a wave of municipal housing subsidies and relaxed provident fund rules rolled out over the past two months. In lower-tier cities, prices fell faster, with some recording year-on-year drops exceeding 6%.

Local governments have ramped up support measures since March. At least 30 cities have raised housing subsidy caps, and more than a dozen have loosened provident fund loan limits to allow larger withdrawals for down payments. The moves have not reversed the broader trend. Monthly sales volumes in May were roughly flat from April, well below the seasonal norm for spring.

The persistent decline keeps pressure on developer cash flows. Several large builders have delayed bond payments in recent weeks, and the number of unfinished residential projects tracked by the NBS rose for a third consecutive month. The central bank has not cut its benchmark loan prime rate since October, leaving local subsidies as the main policy lever.

A separate NBS release showed used-home prices fell 4.8% year-on-year in May, accelerating from April's 4.5% drop. Secondary market weakness has discouraged potential buyers who would need to sell an existing home before purchasing a new one, agents in three provincial capitals said.

The NBS publishes its monthly property data as a weighted average of 70 cities. It does not provide a national aggregate figure.