China's New Home Prices Flat in July as Housing Demand Remains Subdued

China's new home prices remained largely flat in July, underscoring the persistent weakness in the country's housing market. Data from the National Bureau of Statistics, calculated by Varta Wire, showed a 0.1% month-on-month decline, matching the drop seen in June. On an annual basis, prices fell 3.2%, a slight improvement from the 3.3% decline recorded the previous month.

The prolonged property slump continues to weigh on the broader economy, as weak sales and falling asset values dampen consumption and investment. While some markets have shown signs of improvement, these gains have been concentrated in major cities and have not yet translated into a sustained nationwide recovery.

Official data for the first seven months of the year revealed that property sales, investment, and new construction starts all declined at a faster pace. The slowdown comes as the economy grew at its weakest pace in over three years during the second quarter, with retail sales and industrial output also missing expectations in July.

In late July, China's leadership pledged to support the economy with faster fiscal spending and new policies, but stopped short of announcing major stimulus measures. The meeting acknowledged the need to stabilise the housing market without signalling stronger policy support.

Momentum in larger cities also faded. New home prices in tier-one cities were unchanged from the previous month, after a 0.1% rise in June. Tier-two cities saw a 0.1% decline, while tier-three cities dropped 0.3%. Existing home prices in tier-one cities rose 0.2% month-on-month, slowing from a 0.3% gain in June.

Supportive measures this year have largely come from local governments. In early August, Beijing relaxed home-buying curbs, allowing more households to purchase homes in the central area and increasing mortgage access through the housing provident fund programme.