BEIJING (Reuters) -China’s new home prices rose for the fifth straight month in May, but at a slower pace, official data on Thursday showed, as the government looks to shore up the crisis-hit property sector.
New home prices in May rose 0.1% month-on-month, slower than a 0.4% gain in March, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
The slower rise in home prices adds to strains on the sector, which is struggling to stabilize and has been losing recovery momentum in recent weeks.
Beijing’s broad-based stimulus measures to prop up the embattled property market since late last year had boosted sentiment in the wake of the abrupt end of COVID-19 curbs in December. But the sector is set to grapple with “persistent weakness” for years, Goldman Sachs analysts said this week, adding its problems would continue to drag on economic growth.
However, prices rose slightly for the first time since April 2022 in annual terms, up 0.1% last month after a 0.2% drop in April.
On the whole, a first-quarter economic rebound sparked by the dismantling of tough anti-virus measures seems to have lost a significant amount of momentum in recent months, prompting China’s central bank this week to cut some short-term interest rates, with expectations of more to come.
China’s central bank cut the borrowing cost of its medium-term policy loans for the first time in 10 months on Thursday.
That could pave the way for the first reductions in the country’s benchmark lending loan prime rates (LPR) in 10 months next Tuesday, analysts said. The five-year LPR is used an as anchor rate for mortgages.
There are also expectations for more property stimulus such as further easing home purchase curbs in first-tier cities.
(Reporting by Liangping Gao, Qiaoyi Li and Ryan Woo; Editing by Sam Holmes and Christopher Cushing)
