House prices in 70 large and medium-sized cities were unchanged in June from the previous month, according to a weighted average index calculated by Refinitiv based on data released by the National Bureau of Statistics (NBS), after declining by 0.1% in May.
Meanwhile, year-on-year, house prices fell at a sharper pace of 0.5% in June (May: -0.1% y/y), the worst performance since September 2015. Accordingly, CAGR fell to 2.3% in June (May: +2.7%), signaling a deteriorating trend in the sector.
Other housing market indicators indicated sluggish performance but suggested that the sector may have bottomed out in May, with building sales and developer financing falling at a milder pace in the year-to-June period than from the year-to-May period. Concerns about further Covid-19 restrictions and troubled developer debt are likely to dampen the real estate market in the near future, despite the recent cut in mortgage rates and the partial lifting of restrictions on the real estate market.