Home prices decline in May on inventory overhang

Residential property prices fell in May for the ninth consecutive month as developers unloaded inventory on the market at steep discounts, South China Morning Post reported. Home prices (measured by price per square meter) among the 100 surveyed Chinese cities fell an average of 1.53% year-on-year and 0.31% from the month before. Large cities posted steeper declines: Average home prices in Beijing and Shanghai fell 3.2% year-on-year. Analysts said an overhang of residential property stock was to blame, prompting developers to slash prices by 15-25% in some areas. However, the month-on-month decline slowed from previous months, perhaps indicating that home prices are bottoming out. “While prices will continue to fall on a year-on-year basis, you can see some signs of stabilizing on a sequential basis,” said Kris Li, an analyst at Shenyin Wanguo Research and Consulting.