China's Real Estate Market Collapses

A sharp drop in the average price of a home in 70 big cities in mainland China, a proxy for the national market.

New home prices fell 1.24% from a year earlier, accelerating from December’s 0.89% decline, according to calculations by The Wall Street Journal based on data released Friday by China’s National Bureau of Statistics.

Secondhand home prices did even worse, falling by 4.4% in January compared with a year earlier. It was the steepest such decline in almost nine years.

The prolonged fall in home prices shows the huge task facing Beijing policymakers, who have taken several steps to revive the housing market but have so far proved unable to turn the market around. China’s property slump has pushed dozens of developers to the brink of collapse, and dealt major damage to confidence in the country.

“The bottom for the housing prices is far from being reached,” said Liu Yuan, head of property research at Centaline. “It will not happen in 2024.”

Private surveys show China’s 100 largest developers recorded a deep slump in new-home sales in January. They sold homes valued at $32.8 billion, down 34% from a year earlier, marking the worst month of sales since at least July 2020, according to data provider China Real Estate Information.