The average price of new homes in 70 large and midsize cities in China fell 0.4% in September from the previous month, the sharpest decline this year. And the drop in the secondhand market was even more pronounced, with prices falling across all 70 tracked cities—the first time this year that has occurred. Prices of pre-owned homes dropped 0.6% month-on-month.
Despite these price drops, there was a rise in transaction volumes in major cities that have implemented supportive policies. In Beijing, 15,843 used homes were sold in September, an 18.8% increase from August and Shanghai saw used home sales rise 9.1% to 20,389 units.
There does appear to be an interest in buying, and it seems that existing government measures have unlocked some pent-up demand, however it is hard to see this rise lasting without a return of positive consumer sentiment, which would be indicated by rising prices. Another piece of evidence of a willingness to buy is the fact that Mainland buyers made up a quarter of Hong Kong home purchases in Q3, with ownership rights that fall under English common law and the investment potential of such properties likely playing a key role.
The Fourth Plenum has begun, and this ongoing decline in property prices is something that they will presumably address more deeply in the 15th Five-Year Plan.